End of the IOU: P2P Payments the New ‘Social Norm’
Bank of America Survey Highlights Rapid Growth of Person-to-Person Payments, Reveals Real-Time Speed, Peer Influence and Rise of Offerings Driving Usage
It appears Americans have run out of excuses for not paying their friends back in a timely manner, whether it’s for a $5 latte or $2,500 vacation. A new survey released today finds 36 percent of adults currently use a person-to-person payments service (P2P), with millennials leading the charge at nearly double that rate (62 percent). What’s more, 45 percent of non-users say they plan to start using the service within the next year, foreshadowing exponential growth in the coming months.
These findings are from the latest Bank of America Trends in Consumer Mobility Report, exploring emerging payments trends – specifically P2P technologies that allow consumers to send money to others via their mobile device – and forward-looking behaviors among adult consumers who own a smartphone and have an existing banking relationship at any financial institution. The release of the survey follows the bank’s recent introduction of aspects of the Zelle℠ experience into its mobile banking app.
“Technology is developing faster today than at any time in history, and our newest report demonstrates how consumers are embracing emerging technologies to make sense of their financial lives,” said Michelle Moore, head of digital banking at Bank of America. “We were among the first institutions to integrate the features of Zelle this year, and we look forward to developing new innovations that anticipate our customers’ ever-changing needs in the payments space.”
Timing is top of mind
In a world where mobile technology is ubiquitous, most users say they started using P2P due to convenience and time savings (68 percent). This motivation is closely followed by peer influence (48 percent), new offerings from banks (30 percent) and a desire to no longer use cash or checks (16 percent).
Users are also in agreement that time is of the essence when paying each other back. The majority (69 percent) of respondents say they pay others back within the same day, and one-third say in under an hour. Similarly, 53 percent expect others to pay them back within 24 hours, and 22 percent within the hour.
Minding payments p’s and q’s
When it comes to what people are paying each other back for, just about anything goes. Practicality tops the list with shared bills (45 percent), including utilities and rent, being the most popular reason to use P2P, which is closely followed by shared expenses for gifts (42 percent), travel (37 percent) and dining (35 percent).
And the dollar amount doesn’t seem to matter much either. Fifty-one percent believe requesting a payment from others for $5 or less is socially acceptable, and 36 percent claim no amount is “too low.” The same mentality applies to sending funds, as 44 percent say they would be comfortable sending $1,000 or more to others using P2P, with 26 percent saying no amount is “too high.”
Imagining a world without physical currency
In sharing opinions about others’ payments faux pas, it appears that checks cause the most headaches. People are most annoyed by others paying via check in store (51 percent), followed by a delay in cashing checks (38 percent) and ignoring payment requests (24 percent).
As emerging payments continue to rival traditional methods, Americans increasingly question whether today’s youngest generations will ever use cash, checks or credit cards in their traditional forms. When asked what they believe to be true about children under the age of 10, many respondents agree they won’t know how to write a check (71 percent) and won’t use physical credit cards (42 percent). One in seven think the youngest members of Generation Z won’t even know what cash is.
Bank of America’s focus on mobile banking
With more than 22 million active mobile users and growing, Bank of America’s mobile banking platform is an evolving source of increased customer engagement and satisfaction. During the first quarter of 2017, mobile banking customers logged into their accounts 980 million times, or approximately 44 times per user. During that same period, customers made more than 29 million mobile bill payments and nearly 9 million P2P transfers, a growth of 76 percent over 2016. Customers also used their mobile devices to deposit more than 315,000 checks daily and redeem over 1 million credit card cash and travel rewards. More customers are opening new accounts through mobile, with sales increasing by 36 percent over the past year.
About the Bank of America Trends in Consumer Mobility Report
Convergys (an independent market research company) conducted a nationally representative, panel sample online survey on behalf of Bank of America March 20-April 1, 2017. Convergys surveyed 1,005 respondents throughout the U.S., comprised of adults 18+ with a current banking relationship (checking or savings), and who own a smartphone. An additional 407 panelists were surveyed who also use a person-to-person payments service. The margin of error for the national sample of n=1,005 is +/- 3.1 percent, and the margin of error for the person-to-person payments oversample where n=407 is +/- 4.9 percent, with each reported at a 95 percent confidence level.
Bank of America
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 47 million consumer and small business relationships with approximately 4,600 retail financial centers, approximately 15,900 ATMs, and award-winning digital banking with approximately 35 million active users and more than 22 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
Reporters May Contact:
Betty Riess, Bank of America, 1.415.913.4416