Account-to-account (A2A) and person-to-person (P2P) transfers have rapidly grown in recent years, with consumers completing over $195 billion in domestic transfers in the past year, according to a new report from Pleasanton, Calif.-based Javelin Strategy & Research.
According to the Report, "Account-to-Account and Person-to-Person Transfers: Emerging Players Pose Threat to PayPal," $173.6 billion of that figure was transferred between accounts while $21.6 billion was money transferred between individuals.
While PayPal is still the king of the P2P transfer market, Fiserv's PopMoney and clearXchange -- the joint P2P payments venture between Wells Fargo, Bank of America and Chase -- pose a serious threat, says Beth Robertson, director of payments research for Javelin and author of the report.
"PayPal has been in the market a long time, but I do think there's some real competition," says Robertson.
Robertson notes that the recent merger of the Popmoney and ZashPay networks now connect approximately 1,400 FIs, while, the clearXchange network will eventually connect 37 percent of all banking customers once it’s fully deployed.
Though mobile transfers are still behind online transfers in total volume, Robertson there is a lot of growth potential in the future, and active mobile bankers represent a prime demographic target for both mobile and online P2P transfer services.
Overall, says Robertson, consumers who use A2A or P2P transfer services are primarily looking for free or low cost for services, enhanced security and ease-of-use, such as the ability to send money to another person without knowing that person's account information.