P2P users value trust, but disagree on who gets it

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Use of person-to-person digital payments is growing among all age groups, largely because of trust. But opinions differ on which entity in the P2P network deserves the most trust.

Younger users cite trust in friends and family as the main reason for engaging in P2P, while older users say trusting their bank is the key reason, according to a Digital Payments Adoption Study through Early Warning, the bank-backed company behind the P2P service Zelle.

Three months ago, Early Warning surveyed more than 9,000 consumers who are aware of P2P, own smartphones and have access to online or mobile banking.

Millennials stand out in their adoption of P2P services, as more than 75% said they have used the service either online or through mobile devices. Generation X is not far behind at 69%, while baby boomers are at 51%.

"Trust is at the heart of the consumer payment relationship," Ravi Loganathan, head of business intelligence at Early Warning, said in a Wednesday press release revealing the study results. "Our research showed that new segments of consumers engaged in a P2P payment for the first time because it was offered from their own and trusted mobile banking environment or it came recommended by friends, family or peers."

Those who already have P2P services are using them more and making them part of their banking behavior, the study said. Forty-nine percent of millennials said they use P2P payment services at least once a week, compared to 42% of Generation X and 32% of baby boomers.

Survey respondents in all age groups cited security as "very important" for an ideal P2P service, with baby boomers ranking it as a top feature. Gen X placed security third and millennials fifth of 13 feature choices, such as having social features or app reviews attached to the service.

In reviewing usage across the Zelle network, Early Warning said rent, meals, splitting utility bills and sending gifts were the top P2P use cases over a six-month period.

Zelle, a bank-supported P2P service originally developed as clearXchange, made its debut in early 2017.

In the first months of the service, the banks acknowledged concerns about security, handling enrollment for the service and assuring the technology operated as designed. As of late April this year, more than 100 financial institutions were enrolled in Zelle and 19 were up and running.

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P-to-P payments Zelle Early Warning