Peer-to-peer payment adoption is expanding beyond the younger consumers who initially drove the popularity of mobile P2P services. While millennials remain enthusiastic users, growing adoption among Gen X and baby boomers suggests that sending and receiving money digitally is becoming a mainstream payment behavior across generations.
However, consumers of different ages may have different reasons for trying P2P services. Understanding those motivations could help banks and other providers determine how to market their products, particularly as financial institutions compete with standalone payment apps for consumers’ everyday transactions.
So we all know that younger millennials are rabid users of P2P apps. Mercator Advisory Group survey data shows a surprising number of millennials use a P2P payments nearly every day. As P2P moves mainstream, more consumer from older age groups are becoming frequent users as well. Where all age groups may be using P2P, their motivations may be different, which plays into how providers may want to think about promoting the product to more users.
P2P Payment Adoption Expands Across Generations
eMarketer provides some more detail on the topic in a recently released report with data from Early Warning, the provider of bank-based P2P product Zelle:
While mobile peer-to-peer (P2P) payment apps may have first found popularity with millennials as a way to split joint utility bills and bar tabs, adoption has also spread to older generations.
According to an April survey of over 9,000 US internet users by Early Warning Services, the owner of P2P service Zelle, some 75% of millennials and 69% of Gen Xers use a P2P method to send or receive money from businesses, family or friends.
Surprisingly, baby boomers are not all that far behind, with about half saying they use a P2P payment method.
The survey asked consumers what influenced them to try P2P payments. For millennials and Gen Xers, recommendations from family and friends were the highest driver of use.
Older users, though, said they were more likely to try a P2P if the service was offered by a financial institution that they already used. Some 70% of boomers said this was a key driver, compared with just 35% of millennials.
The growing use of P2P payments among older consumers demonstrates that these services are no longer primarily a millennial phenomenon. Although younger consumers may be more influenced by recommendations from friends and family, older users appear to place greater importance on whether a P2P service is offered by a financial institution they already know and trust.
These differences could have important implications for providers looking to increase peer-to-peer payment adoption. Banks and credit unions may have a particular opportunity with older customers because an established financial relationship can help encourage them to try P2P payments. Providers that tailor their messaging to the motivations of different generations could potentially expand usage as P2P payments become an increasingly routine way for consumers to exchange money.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
