Independent Banker - December 2018 - 62

One trillion dollars. That's
the amount U.S. households
transferred via domestic and
cross-border p2p payments in
2017, according to Aite Group.
This is up 111 percent from
2014. It's safe to say that p2p has
now fi rmly rooted itself in the
American payments ecosystem.
Within that explosive
growth are pockets of increase
on particular platforms. For
example, bank-centric solution
Zelle has catapulted ahead of
Venmo transactions as of the second quarter of 2018:
Zelle reported 100 million transactions and $28 billion
in payments, while Venmo logged just over $14 billion
in volume.
What's driving this growth? For one, p2p has become a
more ingrained solution in the industry. It's no longer just
early adopters who are jumping on the p2p bandwagon.
At this stage, the early majority and the late majority have
come into play. According to Zelle's Digital Payments
Adoption Study, more than 75 percent of millennials have
used online or mobile p2p payments. Generation X is a
close second at 69 percent, and baby boomers aren't far off
at 51 percent.
" Ask just about anyone if they use a p2p service, and the
answer is yes, " notes Tina Giorgio, president and CEO of
ICBA Bancard. " This is a $100 billion-a-year business that
is still growing by double digits. Community banks should
defi nitely be off ering a p2p solution. "
To that point, p2p usage is growing because of the sheer
fact that it is a fast and easy way to move money. From
apps that allow for in-house account transfers to full-blown
p2p solutions that send and receive to any account, many
institutions have rolled out an initial off ering, increasing
the number of transactions and the number of users.
And with this increased demand by banks, core providers
are motivated to enhance their off erings. These upgrades
result in better, more intuitive products for consumers and
solutions that take the friction out of the implementation
process for the bank. Essentially, the whole payment chain
is simplifi ed.
" The core and mobile banking providers have built the
integration to make it easier to deploy p2p solutions today, "
summarizes Giorgio. " This not only makes the solution
convenient for customers but [also] off ers security a standalone
solution may not have. "
A dizzying array of choices
But for community banks that are looking to upgrade
an existing p2p option or launch one for the fi rst time,
competing solutions with varying pros and cons make the
decision diffi cult.
" It boils down to what is the bank's strategy on money
movement, " remarks Norman Marraccini, vice president
of product management, money movement and lending
at FIS. " They have to have a p2p service, and they have to
have a p2p service that moves money in real time. It truly
just depends on what's their appetite for cost and what's
their appetite for having a third party, like Zelle. "
The good news is that there are a host of solutions
that community banks can consider. To make the choice
Who has used online or
mobile p2p payments?
51%
Baby boomers
69%
75%
62 Q ICBA Independent Banker Q December 2018
Generation X
Millennials
Source: Zelle's Digital Payments Adoption Study
Independent Banker - December 2018

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