New figures show peer-to-peer digital payments in the U.S. are trending upward in a big way. P2P payments involve consumers sending money to friends, family and colleagues through a digital app. Examples include Zelle, Venmo and Square Cash.
eMarketer said this year there will be 82.5 million mobile phone peer-to-peer (P2P) payment users in the U.S. That's over a third of the mobile phone population. They predict by the end of 2022, over half (52.5 percent) of mobile phone users will have made at least one P2P transaction in the past month.
Growth fueled by younger users
eMarketer analysts noted the increase in P2P payment usage is mainly being driven by millennials.
“Younger consumers are willing to engage with platforms they feel they can trust, but that also allow them to engage in ways that are consistent with how they normally operate in their lives,” said Juan Benitez, general manager of PayPal-owned Braintree, in an eMarketer report.
An April 2018 study by Early Warning Services found that nearly half (49 percent) of millennial smartphone owners in the U.S.—which the study defined as 22- to- 37-year-olds—have sent or received money at least once a week.
Zelle dominates the P2P space
While upstart Venmo achieved first-mover status among young users, banks responded with a product that their huge customer bases are leveraging heavily. Zelle, the digital payments company owned by Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, Citibank, and Wells Fargo is the clear leader among P2P apps at the moment, according to eMarketer figures.
Bank of America announced recently that the company’s active Zelle users have already completed more transactions this year than in all of 2018. In less than nine months, Bank of America clients sent and received a total of 163 million transactions, compared to 157 million transactions throughout 2018.
“Our 37 million digital banking clients are driving the person-to-person growth trend,” said David Tyrie, head of advanced solutions and digital banking at Bank of America.
BOA officials said they are on track to surpass 9 million active Zelle users this year.