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Person-to-Person Transfers - The Final Cash Frontier
August 13 - A new report from Javelin Strategy & Research estimates that consumers transferred over $195 billion in 2011 using online, mobile, and other electronic channels. Person-to-person transfers accounted for $21.6 billion of the transfer market, while the bulk of transfers were made between individuals’ own accounts. Three primary contenders are vying for the top position supporting these transfers: PayPal reigns as the current market leader, but Fiserv’s Popmoney and the clearXchange consortium pose serious threats with networks linking thousands of financial institutions (FIs) and consumers.
Popmoney connects 1,400 FIs and a potential 16% of U.S. banking customers through their existing online and mobile banking relationships. Similarly, clearXchange - a partnership among Bank of America, JPMorgan Chase, and Wells Fargo - represents 37% of the total U.S. banking market. In the past year, one-third of consumers made an online P2P transfer, while fewer than one-in-ten completed a mobile transfer, but the potential for both channels is continuing to grow.
A True Winner Has Yet to Emerge Within the P2P Ecosystem
"Significant revenue opportunities are up for grabs for the P2P vendor that emerges as the leading multi-institutional transfer provider, but there is no clear indication who that vendor will be,” said Beth Robertson, CCM, Director of Payments Research at Javelin. "In addition to PayPal, Popmoney and clearXchange, there are a number of newer P2P players, such as American Express Serve, Dwolla, Chirpify, and Square, that threaten to shake up the market with their with innovative platforms, approaches, and technologies.”
“FIs and vendors also need to get ready for the next wave: international mobile P2P transfers," said Jim Van Dyke, President, Javelin. "Mobile P2P transfers have already achieved strong adoption and usage within emerging international markets. Our research shows that one-third of all mobile consumers and one-third of underbanked mobile consumers in the U.S. are likely to complete an international P2P transfer using a mobile device."
Javelin’s report presents a comprehensive review of the size and market share of account-to-account (A2A) and person-to-person (P2P) transfers, examining key market segments, mobile P2P transfers, and recent P2P initiatives and trends. The report references Chirpify, clearXchange, Dwolla, MoneyGram, NACHA, PayPal, Popmoney, Serve, Square, and Western Union. This 30-page report contains 13 graphical figures. The report is based on two online surveys of 3,100 and 5,300 consumers each.