P2P Payments Popular with Millennials

Home » FinTech » P2P Payments Popular with Millennials

P2P Payments Popular with Millennials

We’ve all been there — you go out to eat with a group of friends only to realize that everyone wants to pay with a credit card. You could make the poor waiter split the check (something that they never seem very happy to do) or designate one person to cover it with the intention that everyone else will pay them back. So will you send your friend a check, wait to pay them in cash, or try one of those money-sending apps you’ve been hearing about? It seems more and more Millennials are now answering with the latter.

A new study by GOBankingRates found that, while cash is still the most popular choice, peer to peer (P2P) payment options are gaining stream among those aged 18 to 34. Over a quarter of those asked said they prefer to use apps like PayPal or Venmo when receiving money from a friend or paying someone back. For the record only 8% like writing or getting checks while another 8% use electronic bank transfers.

There are many reasons that users like P2P options. The biggest reason is convenience. While Millennials may prefer to receive cash, having cash on hand is rare for many 20 and 30-somethings. In addition to the logistics of getting to an ATM there’s also the matter of making change to ensure you don’t overpay. Meanwhile P2P apps allow users to send the exact amount they need to and have it taken directly out of their bank account or charged to their credit card.

Another feature that appeals to Millennials is being able to gently remind friends that they owe them money. Most P2P apps give users the ability to request money from others and have the debtor be notified via text message or e-mail. This also helps keep track of who owes who — an important feature since those in this age group apparently lend and borrow money more than any other.

As for which apps in particular are the most popular, the winner is PayPal with 11% of overall respondents citing it as their preferred method of payment. Venmo had 6% followed by Google Wallet with 5.1% and Square Cash (which has a deal with the popular app Snapchat that allows users to “snap” each other funds) at 4.3%. Incidentally Venmo has been owned by PayPal since 2013.

While they still have quite a ways to go before catching up to cash, the growing adoption of P2P apps among Millennials is encouraging for FinTech overall. It indicates this generation is willing to look beyond the status quo and seek new alternatives that offer greater convenience and ease of use — a staple of many FinTech operations. This is just the latest sign that the future of banking is digital and it’s time to get on board.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Chainalysis Suggests $2.8 Billion in Bitcoin Was Laundered Last Year

For as much mainstream success and acceptance as Bitcoin and other cryptocurrencies have enjoyed in recent years, there are still those who remain skeptical of digital currency. In addition to those who criticize crypto for not having any "real value," regulators have repeatedly pointed to the ability to "launder" funds...

Chime, Robinhood Top FinTech VC Investments in Q4 2019

Looking back at 2019, it's fair to say that it was a pretty good year for FinTech. From startups launching new products to major acquisitions being announced, there was plenty of news to keep up on. Of course 2019 was also a big year for investments. In fact, the latest...

GoDaddy Unveils New Logo to Empower "The Everyday Entrepreneur"

To compete as a small business in the 21st century, there's no question that you'll need an effective website. For many, GoDaddy.com has been a starting point for this journey. With more than 19 million customers and 77 million domains under its registration, Arizona-based GoDaddy has become one of the...