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New Consumer Survey Finds Increasing Demand for P2P Payments

FIS_logo-140px.jpgFIS has announced results of research by eCom Advisors that it commissioned along with NACHA and PayPal finding that "demand for electronic person-to-person (P2P) payments and transfers is growing rapidly and the interest of making these and other payment transactions through an ePayment Portal is strong as well. In fact, the study found that of those who were interested in the Portal concept, 70 percent would be likely to use P2P payment services within that Portal."

The study revealed that a substantial opportunity exists for electronic P2P payments to replace cash and check money exchanges that take place between individuals. Almost 50 percent of consumers expressed interest in using electronic P2P for common needs – for example, sending money to a child at college, sending money out of the country or splitting the cost of a gift with family members, co-workers or friends. To encourage adoption, banks would need to position electronic P2P payments as a component of a payment and money movement solution. The research indicates that banks will benefit most by promoting P2P payments to online banking and bill payment customers, as well as users of mobile banking services and payments. The study also suggests that there should be a strong link between banks’ mobile banking solution and the electronic P2P Portal concepts.

The study also showed that there is a significant opportunity to drive adoption by increasing consumer awareness of the simplicity of initiating electronic P2P payments. Promoting the ease of use and variety of channels for P2P payments will be critical for financial institutions. Furthermore, 34 percent who expressed interest in the Portal concept indicated they would be willing to switch to a bank that offers electronic P2P payments as part of an ePayment Portal. The ePayment Portal was a new product concept tested in the research and is defined as a service provided by a financial institution that allows consumers to transfer money, pay bills, conduct P2P payments, and track all their money movement from a single place online.

“The major objective in conducting this research was to investigate and understand specific strategies to increase consumer adoption of online bill payment and P2P payments,” said Paul McAdam, a partner at eCom Advisors. “Once we uncovered the attitudes and perceptions of the participants as they related to electronic payments, we were able to determine the role of a financial institution as a centralized money movement portal and offer ideas on how to promote this type of service.”

“FIS was encouraged by results of the study indicating that almost three quarters of the participants surveyed are comfortable with the idea of P2P payment options and see the value proposition of having the ability to make all payments from within an ePayment Portal,” said Frank D’Angelo, executive vice president, FIS Payment Solutions Group. “This is good news for financial institutions who want to introduce or increase adoption of electronic P2P payment methods. The research reinforces FIS’ commitment to centralize the ePayments experience for banks and their customers.”

FIS has integrated PayPal's P2P payment system into its online bill payment application for financial institutions. FIS’ P2P solution enables its banks clients' consumer and business customers to make fast, secure payments from their bank accounts to PayPal users worldwide through the Internet or mobile devices.

This research study was jointly sponsored by FIS, PayPal and NACHA and conducted by eCom Advisors. FIS, PayPal and eCom Advisors will present more detailed research results at 11:15 a.m. on Monday, April 26th during the NACHA Conference taking place in Seattle, Wash. FIS will also present the results of the study at its upcoming Client Conference in Milwaukee, Wis., in May of 2010. Additional research results will be posted at eCom Advisors’ website (http://www.ecomadvisors.com)

Methodological Notes

In February 2010, eCom Advisors administrated an Internet survey to 1,180 active online banking customers. The research was jointly sponsored by FIS, PayPal and NACHA. The goal was to understand specific strategies to increase consumer adoption of online bill payment and P2P payments and determine the viability of the role of a financial institution as a centralized money movement portal.

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Very interesting. What about mobile payment capability? Any research or studies on consumers feelings towards making payments from their mobile device?

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