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Person to Person Payments Still Cash Based
Wednesday, October 30, 2013 6:55 AM

Sixty percent of consumers make at least one payment per month with a laptop or desktop computer, according to a survey commissioned by Fiserv.

Calling the volume of digital payments a "critical mass," Fiserv also reports 30 percent have made a payment via their mobile phone and 22 percent on a tablet. Sentient Decision Science conducted the survey of 2,533 U.S. consumers in May 2013 on behalf of Fiserv.

Despite the penetration of digital payments, person-to-person payments are still largely paper-based in the U.S., Fiserv says. While 88 percent of consumers have sent money to another person in the past 12 months, 56 percent used cash, 41 percent used paper checks and 31 percent used an online method such as a bank-based service or PayPal.  The most common way to exchange funds is giving cash in person. Cash accounted for 33 percent of all person-to-person payments, Fiserv says.

Nearly a third of respondents reported they never have enough cash on hand to pay someone back; for 18 to 24 year olds, that figure rises to 39 percent. And 79 percent said they would be open to using a digital person-to-person payment service from their bank, Fiserv says.

Among respondents who made person-to-person payments, people most often sent money in the past year to friends (41 percent), children (41 percent), parents (37 percent) or other family members (42 percent). Among respondents with children, 63 percent said they had sent money to their children in the last year, with parents aged 45 or older most likely to have done so. And the exchange of money between parents and children is not a one way street—56 percent percent of Gen Y respondents and 35 percent of Gen X respondents said they sent money to their parents within the past year, according to Fiserv.

Splitting bill payments is the norm among U.S. households, with one person paying the bills and others reimbursing the payer. Forty-six percent say someone in their household pays the bills and others pay them back for all or a portion of the costs, 22 percent reported using a joint bank account and 14 percent said one person pays some of the bills while another person pays the rest. The number of married couples paying each other back for bill payments is significantly higher among younger generations, with 64 percent of married 18 to 24 year olds and 57 percent of married 25 to 34 year olds taking this approach. People are also uncomfortable requesting money owed to them, so much so that nearly 50 percent have let people not pay them back because they didn't want to ask, Fiserv reports.

 

(Source: Payments Source, 28 October 2013)