Many Consumers Report P2P Funds Availability Takes a Day or More

Speed is a key selling point for person-to-person payments, but many P2P users aren’t taking advantage of real-time payment capabilities offered by their providers, according to research firm Aite Group LLC.

Answers from 693 consumers who had used a digital P2P account to receive money in the 12 months ending in 2017’s fourth quarter show that 53% of respondents said they were able to use funds within 30 minutes or less of reception. That includes some 11% of respondents who said they had their funds in less than a minute and 18% claiming funds were available in one to five minutes.

Still, many consumers reported funds availability took 24 hours or more. “With real-time payments capability becoming a common offering among providers, a surprising 25% of U.S. consumers who have used their digital P2P payment account in the last 12 months report it took more than one day to receive a digital P2P payment,” says the new report by Talie Baker, a senior analyst at Boston-based Aite. “This indicates that a large portion of U.S. consumers are not making full use of the real-time payment capability offered by their provider.”

Some P2P services, including the bank-controlled Zelle and Facebook Inc.’s Messenger, don’t charge for real-time payments. Others do, however, including PayPal Holdings Inc. and the PayPal-owned Venmo service, according to Aite.

“Sixty-eight percent of U.S. consumers who used Facebook Messenger to receive payments in the previous 12 months and 79% of U.S. consumers who used Zelle to receive payments in the previous 12 months reported receiving payments in 30 minutes or less,” the report says. “By comparison, just 41% of U.S. consumers who used PayPal to receive payments in the previous 12 months and 49% of U.S. consumers who used Venmo to receive payments in the previous 12 months report receiving payments in 30 minutes or less. More than 20% of U.S. consumers who used PayPal or Venmo in the previous 12 months to receive payments report it took more than one day to receive a payment.”

San Jose, Calif.-based PayPal is working to generate revenues from P2P transactions, which historically have been free to consumers. With Venmo, for example, the company charges consumers for instant transfers, and more merchants are paying to accept the service.

In other findings from the wide-ranging study, Aite says Bank of America is the leading financial institution consumers use to access a Zelle account. Some 26% of 258 respondents with a bank-provided Zelle account said they used BofA to access Zelle. Next were Wells Fargo, 22%, and JPMorgan Chase, 20%. Well behind those three were U.S. Bank in fourth place with 6%; Capital One, 5%; PNC, 4%; Citibank, 3%; BB&T, 2%, and other providers, 12%.

The study is based on two surveys. One, commissioned by Visa Inc., surveyed 2,078 consumers in late 2017. In the other, Aite surveyed 2,538 consumers who received funds disbursements between June 2017 and May 2018.