The total volume of account-to-account money transfers reached $938 billion in 2015, and it turns out consumers are more comfortable with online transfers via desktop or laptop than mobile transactions.
Those are two of the results revealed in the report “P2P Payments in 2015” from the Pleasanton, Calif.-based Javelin Strategy & Research. The report also described how the market continues to grow and evolve as new technologies, vendors and capabilities provide consumers with a range of payment options.
Javelin examined the overall P2P market, including the various channel segments driving market growth and sizing. The report also reviewed the consumer segment power users of P2P and their preferred channels, and provided additional perspectives on the A2A, or “me to me,” money transfer market.
The FFIEC defines online P2P or email payments as those that typically use traditional payment networks to transfer funds electronically from one consumer to another. Like P2P payments, A2A transfers are commonly initiated through the consumer's Internet banking service, a biller's payment website, or telephone instruction from the consumer. Unlike P2P transfers, consumers must access an existing retail payment account (deposit account) at a financial institution in an A2A transaction.
“Consumers are more comfortable making A2A transfers from a PC or laptop than from a mobile device, particularly when transferring funds between different institutions,” Javelin said.
Consumers conducted $714.78 billion in A2A online transfers in the past 12 months, which compares to $224.04 billion in A2A mobile transfers. The report revealed online banking systems’ longtime accessibility, as well as the limits placed on mobile banking platforms, as likely reasons for the online channel preference.
Wire transfers from financial institutions dominated the market with $139.21 billion transferred in the past year. The next-largest category was online transfers from a financial institution, at $84.85 billion. Because most online bank transfers are low-cost or free and made at the consumer’s convenience, they represent a major threat to financial institution wire transfers.
While much hype surrounds the mobile P2P services offered by companies such as Venmo and Facebook, money transmitters such as Western Union and Money Gram are generating enough annual volume to demonstrate a strong consumer need for the service as well. Consumers sent $139.21 billion in P2P payments from financial institutions and another $30.8 billion from money transmitter services.
In addition, the average transaction dollar value of a financial institution-provided P2P service totals $227, compared to $130 for services not provided by a financial institution.
Other findings from the report include:
- Consumer adoption of online A2A transfers within the same financial institution stood at 55%, compared to 38% for the same function on a mobile device.
- Adoption of A2A transfers between financial institutions was 37% in the past 12 months for the online channel versus 27% for the mobile channel.
- The bulk of mobile A2A transfers performed moved money within the same institution ($170.29 billion).
- Online P2P transfers show the highest levels of consumer adoption, with 32% at financial institutions and 31% at non-bank providers such as PayPal.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
