One of the many things I love about family reunions is the opportunity to talk to my college-aged nieces and nephews about what the latest trends on college campuses. Since these digital natives are early adopters of most technologies, what they are doing on college campuses today often makes its way into the mainstream in a few years (think Facebook).
When I asked my nephew about mobile payments apps he uses to transfer money from his smart phone, he had one word for me: Venmo. With SnapChat’s recent announcement about their new mobile payment service, Snap Cash, it’s a good time to revisit what’s new in this space.
Here’s how fast this market is developing (Economist):
HANDLING small transfers between individuals is not an especially big or lucrative part of the financial system, but it is a faddish one. On November 17th Snapchat, a popular app that lets users send each other photos that disappear after a few seconds, introduced a new service called Snapcash that allows them to transfer money (with luck, no vanishing is involved). The news comes hot on the heels of the announcement from Groupe BPCE, a French bank, that its customers will soon be able to send each other money via Twitter, a microblogging service. Facebook, a social network, has similar plans; Apple, which recently launched a payment service, may also join the fray.
So, there you have it, Facebook, Twitter and Apple are all eyeing the mobile payments market, which means we will be hearing more about this in the months ahead. Why are they so interested? Think growth; Venmo (owned by PayPal) being a good example with transfers up 50% quarter to quarter:
Person-to-person (P2P, in techno-speak) payments are growing fast. Last year Forrester, a market-research firm, predicted that mobile P2P payments in America would amount to only $4 billion a year by 2017. Now it expects the market to reach $5 billion this year and to grow by 26% a year, to reach $17 billion by the end of 2019. (Two-thirds will be domestic transfers, the rest international remittances.) Venmo, a P2P startup now owned by PayPal, an online-payments firm, says that it transferred $700m in the third quarter of the year, 50% more than in the second.
Activity idea: have your students research several of the various mobile person-to-person payment services (e.g. Venmo, Snap Cash) and compare them along various criteria: ease of use, security and fees. Which, if any, would they use?