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RIP to the IOU. Make Room for P2P
Tuesday, January 2, 2018 6:35 AM

Doug Foister, Vice President of Research, Cornerstone Credit Union League

Pardon the acronyms, but there is a new social norm in America that is quickly eliminating Americans’ excuses for not paying their friends back in a timely manner. And we need to pay close attention. A recent Bank of America survey reveals that 36 percent of adults currently use a person-to-person payment service (P2P), with Millennials leading the pack at nearly double that rate (62 percent). Furthermore, 45 percent of current non-users say they plan to start using the service within the next year. Following are some additional findings that reveal the drivers of the phenomenal growth of this new technological force.

Who is using P2P?
While Millennials are the most prevalent users, adoption of P2P is strong across all generations. Gen Xers clock in at 34 percent, Baby Boomers at 20 percent, and Seniors at 10 percent. However, nearly half of those who do not use P2P presently anticipate they will use the service in the coming months, with Baby Boomers (49 percent) and Gen Xers (48 percent) being most likely to do so.

What is influencing the use of P2P?
 Time savings and peer influences are the top motivators.

motivators

What do people use P2P for?
Practicality tops the list with shared bills, closely followed by expenses for gifts and travel. Younger Millennials (18–24) are the most active P2P users.

uses

How much will consumers send using P2P?
Nearly half of the survey respondents would be comfortable sending $1,000 or more.

consumer spending

Without question, P2P is a growing powerhouse in the next era of banking. With technology developing faster today than at any time in history, we must understand how consumers, which includes our members, are embracing emerging technologies such as P2P as they attempt to make sense of their financial lives.