Advancing From In-Person Cash to Electronic
When consumers spend their money, they don't just spend it on businesses and organizations in exchange for goods and services. They also spend it on each other.
Whether it's giving a gift to a grandchild, splitting a restaurant bill with a friend or providing a tip to a waitress, households typically spend thousands per year on person-to-person transactions, the name the payments industry gives to money that's paid, given or transferred to another individual (not a business, school or organization).
Out of the many channels through which P2P transactions can be completed in the U.S., most were made in person, Shevlin said. Face-to-face transactions account for 73% of this past year's P2P transaction volume and 66% of P2P dollar volume.
While very few Americans use mobile devices to make P2P transactions (Aite Group finds households spend an average of just $8 per year on P2P transactions made using the mobile channel), researchers expect that amount to increase. According to the report, Nielsen estimates 50% of Americans will use smartphones by the end of 2011, causing mobile payment methods to start pushing cash and checks aside.