P2P Brands Can Gain Wallet Share Despite Consumers’ Loyalty to a Primary Brand, J.D. Power Finds

While consumers remain extremely loyal to their primary peer-to-peer payment brand, opportunities exist for other brands to gain share of wallet as a secondary brand, as consumers use more than one P2P service to ensure they can send and receive money across their entire social network, a recent study by J.D. Power says.

On average, consumers use 2.8 P2P brands, with Zelle being the leading brand and PayPal the most common secondary brand. Some 47% of P2P users have a secondary account with PayPal, according to the study. J.D. Power conducted the study from January to March and received 6,105 responses.

“Consumers do have persistent loyalty to the primary P2P brand, but they are willing to add other brands to their P2P arsenal to accommodate family and friends that use other P2P brands to send and receive money,” says Sean Gelles, senior director of payments intelligence at J.D. Power.

The willingness of consumers to use more than one service creates “an interesting dynamic” in that there is an opportunity for other brands to gain share with consumers even if they aren’t the consumer’s primary brand, Gelles adds.

Factors that lead to consumers favoring one brand over another include trust, whether the brand is favored by family and friends, and transaction security. Some 41% of respondents say the most likely reason to switch brands for both sending and receiving money is that family and friends use a different brand.

On the question of security, 27% of respondents cite concerns about sending money, including unauthorized transactions initiated from their account, and 25% cite concerns over not receiving money.

Once a P2P brand establishes a track record for security, consumers come to trust it and make it their primary brand. “At that point it becomes unlikely they will switch their primary brand,” Gelles says.

Consumers tend to favor the Zelle brand because the network connects directly to their bank, as opposed to an intermediary, which helps establish trust in the network. “Consumers trust their bank, which creates a halo effect,” says Gelles.

How banks integrate Zelle into their mobile and electronic platforms also plays a significant role in customer satisfaction, the study finds. One feature that makes Zelle stand out is that it can be customized by the financial institutions within the network to create unique customer experiences. For example, Capital One Financial Corp. makes Zelle easy to discover on the home page of its Web site. The bank also offers a pay/move screen featuring a Zelle-centric money-movement capability and a final send screen that displays the recipient’s information to reconfirm money is being sent to the right person.