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NeoBank Varo Says Instant P2P Payments Key To Customer Retention, Growth

As a growing number of consumers use peer-to-peer (P2P) payments, word-of-mouth has become one of the best advertisements for the technology.

A multitude of P2P users are tapping these platforms to send funds, giving the potential recipients who have not yet joined further incentive to do so. These platforms have become particularly popular over the past 17 months as consumers seek fast, digital payment methods, meaning the financial institutions (FIs) that have been on the sidelines regarding the technology can no longer afford to overlook it.

The August Disbursements Tracker® provides a breakdown of industry players and covers the news and trends in the disbursements ecosystem, including headlines about how P2P services have experienced a boom during the pandemic. It also examines why improving the interoperability of these services is key to continued growth.

Around The Disbursements Landscape

Despite the Nigerian government’s efforts to limit banks’ handling of bitcoin, the cryptocurrency has witnessed strong growth within the nation due at least partly to the availability of P2P trading platforms. The country’s central bank has reinforced 2017 legislation to prohibit FIs from dealing in bitcoin. Many Nigerians have turned to P2P trading to circumvent this, transferring $38 million via platforms LocalBitcoins and Paxful from July 4 to Aug. 4.

Global P2P lending grew between 2015 and 2020 and is expected to wintess a compound annual growth rate (CAGR) of 31 percent through 2025, according to a report. The survey found that P2P lending, which occurs when consumers or businesses borrow money from one another with no involvement from FIs, typically involves a borrower seeking unsecured personal, business or educational loans. Such borrowing is seen as an efficient way to promptly, paperlessly transact when compared to traditional financing options.

Digital payments have caught on with consumers, but a sizable portion of B2B firms are missing out on the trend, Ingo Money CEO Drew Edwards said during an interview with PYMNTS. He explained that many companies are still saddled with using checks, which can take weeks to settle and come loaded with friction in other ways. Still, there are ample opportunities for digital innovation, he said, particularly in the insurance disbursements, payroll and supplier payments sectors.

For more on these and other stories, check out the Trackers News & Trends section.

Neobank Varo On Serving Customers’ Needs As P2P Payments See Rapid Rise In Usage

P2P payments have more than just caught on with consumers; they are fast becoming one of their favorite payment methods, whether they are paying back their friends or family members or settling doctors’ bills. Consumers’ increased demands for P2P services has made it abundantly clear to FIs that the must do all they can meet their new needs, including adding fresh P2P platforms to their lineup of services.

In this month’s Feature Story, Wesley Wright, chief commercial and product officer at nationally chartered neobank Varo, examines why customers are clamoring for P2P payment options and what FIs of all stripes can do to keep up with demand.

To get the full story, download the Tracker.

Why P2P Payments Are On The Rise And How Interoperability Can Take Them Higher

Consumers’ newfound digital payment habits have led them to seek out fast, frictionless methods they can use to make purchases instantly and with as little fuss as possible. It is perhaps no surprise that this shift has led to increased demand for P2P payments, but there is still one big hurdle these services must overcome: their lack of interoperability.

This month’s Deep Dive examines the rise of P2P payments across multiple use cases and why fostering interoperability will be key to giving customers true choice in the P2P space.

Read the full Deep Dive in the Tracker.

About The Tracker

The PYMNTS Disbursements Tracker® was produced in collaboration with Ingo Money, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the following findings, methodology and data analysis.

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