Aite - Talie Baker (1)U.S. households made more than $1 trillion worth of person to person (P2P) payments in 2017. Over half of all U.S. consumers in 2017 made a P2P payment. These payments are increasingly becoming digitized with the advent of new and seamless technologies that make cash and check payments seem outdated. The Aite Group conducted a study of almost 2,000 U.S. customers who paid someone or transferred money in any way to look at the trends in P2P payments.  

This report, part one of a two-part series examining the domestic and cross-border person-to-person payments landscape in the U.S., estimates the total size of the P2P payments market, evaluates the difference in U.S. consumer payment behaviors between 2014 and 2017 and provides a detailed analysis of the U.S. domestic P2P payments environment. 

The last decade has seen tremendous growth in the availability of digital payment methods for the average Joe. Tech are posing a huge threat to traditional payments providers by entering the payments space with fast, easy and convenient digital payment methods for consumers. In response to this threat, traditional financial institutions and payment networks are competing by offering new instant payment services in hopes of maintaining control of the payment network. 

Aite Group conducted a quantitative study of 1,974 U.S. consumers 18 years of age and older who paid someone, gave money to someone or transferred money to another individual (not a business, school or organization) for various situations over the 12-month period from October 2016 to September 2017. The survey was conducted online among U.S. consumers who participated in a research panel. 

Cash and checks still represent the most common and ubiquitous P2P payment methods. In addition to being ubiquitous, cash and checks are perceived to be free ways to exchange funds for both the sender and the receiver, promoting their persistence in the market. 

The widespread use of smartphones in the U.S. has attracted new market entrants to the payments industry. Today, many mobile P2P payment methods are available to consumers from FIs and alternative providers alike. The market is still testing the various mobile P2P payment models available, and it is anyone’s guess which service will succeed in replacing cash and checks as the preferred P2P payment methods.  

The market is also focused on providing a ubiquitous, digital, frictionless P2P payments experience for U.S. consumers, and to that end, competition in the space is at an all-time high. While traditional FIs still dominate the lion’s share of the market, alternative P2P service providers are beginning to establish a solid footprint. 

Domestic P2P payments in 2017 accounted for 97 percent of the transaction volume and 89 percent of the dollar value with cross-border P2P payments accounting for the balance. 

Consumers Go Mobile 

Consumers are finally taking notice of mobile P2P payments capabilities – and it’s about time. Mobile P2P payment services have been available in the marketplace for about a decade, and until now adoption has been tenuous at best. Mobile P2P payments services are poised to explode as consumers become accustomed to the convenience and ease of making payments via their mobile devices. 

The top three payment methods used for domestic and cross-border P2P payments in 2014 and 2017 were cash, PayPal and check. 

Among U.S. consumers who made a P2P payment in 2017, 49 percent of U.S. consumers used cash, 47 percent of U.S. consumers used PayPal and 40 percent of U.S. consumers used checks. By comparison, among U.S. consumers who made a P2P payment in 2014, 79 percent of U.S. consumers used cash, 48 percent of U.S. consumers used PayPal and 61 percent of U.S. consumers used checks. 

With fewer consumers using cash and checks for P2P payments in 2017, usage of other P2P payment methods has increased. Among U.S. consumers who made a P2P payment in 2017, 26 percent of U.S. consumers used mobile banking and 15 percent of U.S. consumers used an alternative P2P payment service. 

PayPal accessed via a smartphone/tablet and mobile banking are the most frequently used domestic mobile P2P payment methods. Among U.S. consumers who made a domestic mobile P2P payment in 2017, 56 percent of U.S. consumers used PayPal accessed via a smartphone/tablet and 55 percent of U.S. consumers used mobile banking. That same year, Venmo was the third-most used mobile P2P payment method, used by 15 percent of U.S. consumers. 

Even though consumers are taking notice of mobile P2P payments, room for tremendous growth remains. With more than 75 percent of the transaction volume and more than 80 percent of the spending volume for P2P payments being addressed through legacy and electronic P2P payment methods, the market still has work to do in educating consumers on mobile P2P payment methods. 

As younger Millennials move into their fullest consumer potential, alternative P2P payments services may finally succeed in disintermediating the current P2P payments status quo if they are able to establish trust like that of the FIs and the PayPal brand, along with maintaining a compelling offering that makes payments feel effortless. 


Talie Banker is a senior analyst with Aite Group’s retail banking and payments practice, focusing on person-to-person and cross-border payments. To learn more about Aite Group’s research coverage of retail and wholesale banking and payments, please contact Aite Group at 

Person-to-Person Payments: How Americans Pass the Buck

by Banker & Tradesman time to read: 4 min