Let’s talk about P2P.
Peer-to-peer payment systems (also known as P2P payments) allows users to send money from their own digital wallet to another person. P2P payments can be made in several ways. Some people do it directly from their mobile devices (or via an online portal) through a linked bank account or card. The most common P2P solutions are Venmo and PayPal.
Did you know that Paypal was the first major company to popularize the P2P concept? As such, it is no surprise that it became famous to a lot of people. First of all, it is easy to use and has been proven to be secure. Most importantly, it is free. However, it is essential to point out there are a number of providers that charge 2-3% to process payments drawn from a credit or debit card.
The latest player to enter the P2P arena, with a big splash, is Zelle. Zelle has partnered with banks and credit unions with the benefit of “receiving your money in minutes”. Earlier this week Zelle announced $106 billion was sent through its network on 392 million transactions. This represents year-over-year increases of 74% and 61%, respectively. Transactions through Zelle’s small business accounts increased 180% over the same period in 2020.
P2P payments are in high demand for so many reasons. This type of payment systems allows Millenials to use contactless solutions in transferring money to friends and family. At the same time, P2P payments also make it easy for contractors and service providers to send and accept money.
As the economy opens up, the new convenient methods utilized during the pandemic will replace the old way of paying each other.