Person-to-person or peer-to-peer (P2P) payments have been around for a decade, but until recently have only been used by relatively few people. Now all the marketing noise being created by third-party mobile apps like Venmo, Popmoney, and Square Cash – and the useful service they provide – has sparked renewed interest.
Banks and credit unions are now trying to understand what their customers want from a P2P service, and how they can win against non-traditional providers in the payments space. There are three opportunities for banks and credit unions to provide a positive payment experience that fits into the way customers think about and manage their money.
Group payment functionalities together to increase P2P adoption: Consumers don’t segment payments the way banks and credit unions do. To consumers, “payments” simply means money is either entering or leaving their accounts. Yet banks’ internet channels segment P2P, transfers, and paying bills into different applications with different user experiences.
Some leading banks and credit unions are already starting to group mobile payment functionalities together to create an easier payments experience, and CEB analysis clearly shows that the best way to encourage customer loyalty is to make customer service “effortless”. Banks that provide a unified payment experience will make their P2P service more engaging for customers because it will be a part of the payments system they are already accustomed to.
Design solutions based on common customer use cases: Over four-fifths (86%) of US consumers are aware of P2P mobile apps, according to analysis from Accenture, but they largely use these apps for very specific needs, like splitting a restaurant bill or paying monthly utilities.
Retail banks should look to capitalize on this opportunity by providing customers with a simple solution based on the needs customers have during those specific use cases. For example, since consumers are often splitting restaurant bills, a bank’s new P2P payment service for US customers might split the bill and evenly distribute the tax across the items each individual ordered.
Give customers transparency into how a payment will affect all their finances: Third-party providers such as Venmo rely on a single connection to a consumer account, but banks and credit unions can see into all of a consumer’s accounts. This gives them an opportunity to integrate payments into other parts of a customer’s financial management.
For example, retail banking providers could show customers how their balances are affected as they send and receive money while storing an online “paper trail” of all their transactions, whether they be P2P, money transfers, or bill-pay. This will help them manage their finances and also save the time and effort currently required to transfer money from third-party P2P solutions to traditional savings accounts.