According to Bank of America, peer-to-peer payment services are growing in popularity, with Millennials leading the charge.
BofA just released its latest report on Trends in Consumer Mobility. The report analyzes the data set from BofA’s newly integrated Zelle, a P2P banking app that allows users to send real-time payments to each other on their mobile device. Nineteen banks, including BofA, Citigroup, JPMorgan Chase and Wells Fargo joined forces to create Zelle, the banking version of Venmo.
According to the data set, 36 percent of adults use the app, with Millennials leading at nearly double that rate at 62 percent. The survey found that most respondents, at 68 percent, said they started using the P2P app due to convenience and ability to save time. Peer influence, at 48 percent, was the second reason, followed at 30 percent “new offerings to banks” and at 16 percent a “desire to no longer use cash or checks.”
Sixty-nine percent of respondents said they pay others back within the same day, while one-third said they do so under an hour. Fifty-three percent expect others to pay them back within 24 hours and 22 percent within an hour, BofA said.
Michelle Moore, head of digital banking at BofA, said, “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.” She said BofA was one of the first among the financial institutions to integrate Zelle’s features this year.
The survey also found that users are paying each other back for shared bills, at 45 percent, with utilities and rent among the most popular reasons to use P2P. That was followed, at 42 percent, by shared expenses for gifts. Other top reasons were travel at 37 percent and dining at 35 percent.
According to BofA, the dollar amount didn’t seem to impact on whether or not to use the P2P app. Fifty-one percent said requesting a payment from others for $5 or less is socially acceptable, while 36 percent said that amount is “too low.” Also, 44 percent said they would be comfortable sending $1,000 or more to other using P2P, with just 26 percent saying that amount is “too high.”
Driving the trend to P2P is the current thinking on the use of checks. BofA said people are most annoyed by others paying via check in store, at 51 percent, followed by a delay in cashing checks, at 38 percent, and ignoring payment requests, at 24 percent.
Finally, the survey also looked at the future of mobile payments, particularly on the P2P option. Most respondents — 71 percent — said they believe children under the age of 10 won’t know how to write a check, while 42 percent said they wouldn’t be using physical credit cards. Finally, one in seven think the youngest members of Generation Z won’t even know what cash is, BofA found.