As their financial lives have become more digital, consumers have embraced technology like online bill pay and mobile check deposit.

Yet when it comes to paying other people most still rely on cash and checks. A 2013 Fiserv survey found that 56% of consumers who exchanged money with another person in the previous 12 months had used cash and 41% had used a check, compared to just 31% who had used on online method. 

While digital person-to-person (P2P) payments have gained traction in the last few years, particularly among millenials, these services have yet to hit the mainstream. Focusing on four fundamental factors can boost adoption and use of P2P payments: consumer education, a focus on mobile access, faster payment options and improved interconnectivity among existing P2P payment services and other payment networks.

Consumer Education. Many consumers have only a passing knowledge of P2P payment services. While they may know that such services exist, they are often unaware that their bank or credit union offers one. There is also a lack of awareness about how P2P services work. Common misperceptions, notably that bank account information is required to make a payment or that only certain people can receive payments, can be tackled with education efforts. Educating financial institution employees to be knowledgeable about P2P offerings, and marketing service availability and benefits, are foundational ways to raise awareness and use.

Addressing consumer concerns about security is also important. Proactive communication to consumers about security standards and policies that are in place, as well as reassurance of access to customer care should a concern arise, can give consumers the confidence to use a P2P payment service for the first time. Reiterating that only a name and email address or mobile phone number are needed to send money can also alleviate concerns about sharing personal information.

More Mobile Access: As consumers grow more comfortable making transactions using their mobile devices, financial institutions can capture more P2P payments by extending digital P2P payment capabilities to the mobile channel. P2P payments can be integrated into mobile banking so consumers can easily pay other people as the need arises, particularly in face-to-face situations.

Mobile access in combination with faster payment speeds, discussed below, has the potential to dramatically boost adoption and use of P2P payments. The Fiserv survey mentioned above found that the single most common way for people to exchange funds is to give someone cash in person, accounting for one-third of all P2P payments. As mobile access becomes the standard and payment times speed up digital P2P payment recipients have the same immediate satisfaction as having cash in their hand, positioning digital P2P payments to replace many of today’s cash-based transactions.

Improvements in Speed of Payments: Consumers increasingly expect to be able to make real-time payments. While real-time speed may not be required for every transaction, consumers want to have the option of real-time delivery in specific situations. A “real-time first” mentality, which assumes that real-time is the ultimate standard of delivery, makes sense for digital personal payments. Fiserv research indicates that financial institutions should see a 20 percent higher adoption rate if a real-time, competitively priced P2P payment option is offered in addition to 3-day and next-day delivery options. In addition, consumers have shown that they are willing to pay a reasonable fee for the added convenience and value of having a payment transmitted instantly.

Interconnected Networks: Ubiquity is key to successful P2P. Consumers want to be able to send money to anyone they need to without checking to see if they use a specific P2P payment service or bank at a certain financial institution. Many services ensure this ubiquity by offering websites where payment recipients can go to claim money, but this results in more steps for the recipient than there would be if their bank account were directly connected to the P2P payment service, and can delay the delivery of funds.

Interconnectivity between strategic P2P payment providers and other payment networks can streamline the user experience and speed payments. Similar to the way that once-proprietary ATM networks have evolved to interconnect with each other, making it possible for a consumer to withdraw cash anywhere in the world, an interconnected approach in which P2P networks connect to each other as well as other payments networks (such as card networks) would boost the reach and speed of P2P payments. Better reach and faster speed boost consumer convenience and value, serving as drivers for consumer adoption and usage.

Moving to Mainstream: While the transition from cash and checks to digital P2P payments will not happen overnight, adoption is accelerating as the services mature and consumers grow more familiar with the benefits. Financial institutions and P2P service providers have the opportunity to accelerate this process by educating consumers and promoting the benefits of these services, offering mobile access and faster payment options, and pursuing interconnectivity with other strategic P2P services.

Tom Roberts is senior vice president of marketing for electronic payments at Fiserv.