People Keeping More Cash in PayPal Than Real Wallets: Study
PayPal leads the pack as P2P gains more traction, according to a new study.
The amount of cash people are keeping on hand in their PayPal accounts is more than twice the amount they’re holding in their physical wallets, according to a recent study of online payments.
San Francisco, Calif.-based financial services research company Logica found that the average PayPal balance among Americans with PayPal accounts was $485. They kept far less — $196 on average — in actual cash.
When asked what they’d do with an extra $500, nearly one in five (18%) said they’d put it in their PayPal accounts; more than a quarter (27%) of millennials said the same thing.
“Why are Americans storing money in their PayPal accounts/? Most who keep money in their PayPal accounts do so to maintain a balance for transactional purposes,” Logica said. “Fifty-five percent like to keep money in the account for other payments, 25% find it easier to track expenses, 21% haven’t gotten around to moving the funds and 19% prefer it to a bank account.”
The findings highlight the growing use of person-to-person payments, or P2P, in everyday spending and come on the heels of another recent survey reporting that more than a quarter of mobile bank app users felt person-to-person payments were one of the most important features available in their apps. Fewer than 17% of participants in that survey, which was done by S&P Global Market Intelligence, said the same just a year ago.
“The percentage of Americans who report storing money in their PayPal accounts and the amount of money they hold on balance there is worth paying attention to,” the Logica report noted. “There’s an opportunity for financial services companies to help Americans use this platform to better manage everyday expenses and plan for the future.”
San Jose, Calif.-based PayPal had 244 million active accounts as of June 30, 2018. Mobile checkouts now constitute 39% of its total payment volume, according to the company. It reported $139 billion in total payment volume for the second quarter of 2018. PayPal also owns Venmo.