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Written by Cyndie Martini
on April 30, 2019

Person-to-Person or P2P Payments have become one of the easiest and fastest ways to get money from one bank account into another. By using only an email address, someone can instantly send money to another person's bank account, even if it is at a different bank. For this to work though, both banks need to use the same P2P processor.

Two of the most commonly used P2P services are Venmo and Zelle with Zelle processing 116 million transactions and $32 billion worth of payments during Q3 of 2018. Although Apple Pay was the highest rated mobile P2P app according to Consumer Reports.

Venmo, Zelle, and Apple Pay are 3rd party services. Some banks use a proprietary P2P service. With proprietary P2P, unless the recipient is also using the same bank, money can't be exchanged. Most all P2P services, including Venmo, Zelle, and Apple Pay, are free to use.

Use of P2P Payments

How are people using P2P payments? In Bank of America's 2018 Trends in Consumer Mobility Report, they found that 44% of consumers make P2P payments, which is an 8% year-over-year increase. The following breaks this percentage down by generation:

• Gen Z - 69%

• Millennials - 51%

• Gen X - 37%

• Baby boomers - 28%

34% of respondents use P2P every month, while 33% of Gen Z uses it every week. 81% of respondents are comfortable using P2P to send gifts. The mixture looks like the following:

• Birthdays - 58%

• Graduations - 48%

• Holidays - 48%

• Allowances - 42%

• Weddings - 38%

P2P Payments Continue To Grow

Processed volumes through Zelle have grown from $25 billion in Q1 to $32 billion in Q3 of 2018. Likewise, Venmo has grown from $14 billion to $17 billion during the same period. Financial institutions recognize this growth and the importance of P2P payments to their future.

“Mobile P2P payments have become an increasingly important battleground for financial institutions; tech giants such as Apple, PayPal, and Google; and fintech upstarts such as Venmo and Square,” Talie Baker, senior analyst at the Boston-based research and consulting firm Aité Group, told Forbes.

With their speed and convenience, P2P payments will continue to upward trajectory as more and more consumers adopt P2P as a regular payment method.

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