Startups and banks have watched for years as young consumers shifted from credit cards to debit cards to, finally, P-to-P apps. But what's driving that shift may not be what the providers intended.

Providers of P-to-P apps have long marketed their tools as a means to split dinner checks and pay babysitters, and this has often seemed like a solution to a problem most people don't struggle with. But millennials have found their own reasons to use P-to-P.

Many young or unbanked consumers prefer the simplicity of cash (or a cash equivalent such as P-to-P) over the uncertainty of a card account, which they may see as having unfair fees or restrictions. But cash has its own security concerns — once stolen, it's as good as gone, said Rob Enderle, a tech analyst with the Enderle Group.

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Debit may seem like a good alternative, but most debit cards have access to a consumer's full bank balance, making them a risky choice, he said.

"Debit cards alone are incredibly dangerous so [a mobile app] is a much better alternative for those places where you can use it,” Enderle said.

Mobile P-to-P apps borrow some security from bank-issued payment cards. Some banking apps today allow users to temporarily or permanently lock a lost card, but those cards can still be misused before their theft is discovered. P-to-P apps can have the same security features, while also adding requirements such as PIN or fingerprint authentication for each use. And with Apple Pay, which is getting its own P-to-P element tied into iMessage, tokenization adds even more security.

“We are moving away from cash,” Enderle said. “We’re just doing it much more slowly than a lot of us thought was going to happen.

Many factors led consumers to prefer debit and prepaid cards over credit, including accessibility and budgeting and an aversion to debt, said Laura Townsend, senior vice president of operations at the Merchant Advisory Group. P-to-P apps provide all of these benefits without the pitfall of exposing one's entire bank balance in the event of an account takeover.

“I think this is the first in recent years that credit cards slightly exceeded debit card usage,” Townsend said. “However, debit card usage is a preferred payment type for the younger generation.”

Prepaid cards are still an option for consumers who wish to budget or simply to have an alternative to a traditional bank relationship, and P-to-P accounts increasingly provide the same perks. PayPal's recent move to adapt its popular Venmo P-to-P app for retail shopping demonstrates how the use of P-to-P is evolving to serve new use cases.

“Cash is still big and you’ve got a lot of unbanked or underbanked consumers who just prefer cash,” she said. “These tools are probably the perfect fit for these guys.”

Fifty-six percent of consumers bought prepaid cards in the previous year, according to a study by the Mercator Advisory group conducted in June. This was down seven percentage points from the results of 2016's study.

Karen Augustine, author of the study, was surprised by the decrease and attributes it to the shift to P-to-P and digital shopping.

“Prepaid is still strong because there are many uses of prepaid cards,” Augustine said. She added lower income and unbanked people are becoming more mobile and because of that, prepaid cards make it easier for them to make online purchases.

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