P2P: The Final Payments FrontierSabrina Tharani |
It’s always interesting to connect the dots, and that’s just what we did at Global Insights when we put together the findings of our Mobile Payments Readiness Index and our annual look at U.S. consumers’ payments behavior.
Each year for the past three years, MasterCard has conducted a study to determine shifts in payment types over time in the United States. The study, Smarter Spending and Saving, found volume shifting continually between debit, credit, and prepaid. In 2011, 38 percent of debit and prepaid cards’ increased use came at the expense of cash and checks. However, among consumers with access to a general purpose payment card, about 50 percent of household expenditures are still made using cash and/or checks (I hate that checks make you spell out how much you spend, as if paying bills wasn’t hard enough!).
The research found that these expenses tend to be doctors’ offices, prescriptions, household help and to pay teenagers – in other words, person-to-person (P2P) transactions where cash is the only widely accepted payment form.
Source: Target Research Group, Financial Crisis Study, December 2008, February 2011, and February 2012.
I believe that P2P payments are a major stepping stone in mobile payments adoption, following m-commerce. Migrating from cash P2P transactions to mobile is not only more convenient but also promotes spend management, accountability and budgeting. Financial institutions and merchants alike can encourage consumers to use mobile P2P as part of a larger mobile payments suite through partnerships, product design and targeted reward programs.
Wonder what this new cashless utopia feels like? How about never having to feel guilty for handing your babysitter a big wad of singles, ever again.
Topics: Payments Strategy