Millennials are coming of age and are more connected to their mobile phones and each other in more intricate ways than ever. This generation, defined as the ages of 18-33, are performing many of their most important functions with their smartphones. Mobile P2P (person-to-person) payments are the result of this life and smartphone integration. Now millennials expect that the companies the mobile applications they use not only connect them socially, but allow for person-to-person financial transactions. This demand is a natural stepping stone as many jobs and interactions take place virtually, but mobile P2P providers are having to find strategies that will produce profits for often free mobile P2P services.
According to Forrester Research Inc., mobile P2P payments will reach about $5.3 billion this year, and over $11.9 billion in 2017 in the United States. Services like Venmo Inc., an e-commerce processor, introduced a new app Venmo Touch that allows users to link funding accounts and lets them make payments by tapping the “pay” button. The simplicity and convenience of the application, has driven the volume up by 50% in only three months. Profits have also increased by $232 billion.
But consumers are demanding more than just utility from their mobile payment apps. Ron Shevlin, a senior analyst for Aite Group, believes that users also want social interaction capabilities within their mobile P2P apps. In Venmo, for example, users can add notes and comments to their transaction messages. Still mobile P2P providers are finding that they may have hit the top of their margins of return. Venmo, like most of its competitors, does not charge any fees per transaction. Other apps like Square Cash are free to download and don’t charge any fees for transactions $10 or less.
Currently, most mobile P2P providers have accepted that P2P is a loss leader, but are finding consumers debit and credit information a good source of revenue generation as they use it to promote other services.
A growing number of online merchants are seeing their profits soar by offering mobile P2P to their customers. E-cig merchants have found success using this technology that enables its consumers to pay for product without frequenting c-cig shops or carrying cash. In order to provide this valuable eservice to your customers, you will need a competent online payment processor that can create and manage your electronic cigarette merchant account. Contact us now to learn how your e-cig business can take advantage of mobile P2P.