Evaluating P2P Payment Options for Businesses

Evaluating P2P Payment Options for Businesses

In today’s digital and ever-changing payments landscape, merchants must cater to the various ways in which consumers wish to pay for goods and services. P2P (peer-to-peer) payments are an increasingly popular option. Initially used to split rent with a roommate or share a dinner bill, these apps can now be used to pay for purchases made on smartphones and mobile devices. According to statistics, a third of mobile phone users did so last year. The market research company eMarketer—in their Mobile Proximity and Peer-to-Peer Payments 2018 report —predicts that by 2022 over half of those with smartphones will make at least one P2P transaction per month. The early adopters and thus prime users of mobile payment apps are millennials. With the fast-growing size of this demographic group, should your business accept P2P payments? Here’s a look at three of the most popular platforms.


Credited with fundamentally changing the way money changes hands, Venmo incorporates a social aspect that appeals to millennials. Once a user makes a transaction with the app, the purchase details are shared on their news feed as well as with their network of friends. According to a Venmo spokeswoman, users on average check the app two to three times a week to view, like, and comment on their friends’ buying experiences. As transactions turn into chats, a merchant’s brand can get valuable exposure. In this respect, Venmo provides a powerful digital version of word of mouth marketing. Approximately three-fourths of the app’s users are under 35 years of age.

Venmo is owned by PayPal and the companies share the same cost per transaction: 2.9% + $.30. Custom pricing is available based on volume and business model. If your business already has a PayPal account you can automatically accept Venmo payments. Merchants using Venmo as a mobile checkout option cannot sell goods or services in-person, as the app is only for online purchases.

Cash App

Cash App entered the money-transfer market in 2013 as Square Cash. Owned by Square, Inc., it is similar to Venmo minus the social aspect. The Cash App allows users to buy and sell Bitcoin, which is possible but more difficult using Venmo. The Cash App charges businesses 2.75% per transaction.

In 2015 the company launched $Cashtags. A $Cashtag is a unique name, akin to a digital address, that identifies businesses that accept payments via the Cash App. The cost to businesses is 1.5% of the transaction total. The product’s target audience is small businesses and non-profit organizations that can use their $Cashtag as an alternative to receiving checks for payments or donations. In order to pay for a product or donate to a charity, users simply enter the company’s $Cashtag in the app, or they can go to http://www.cash.me.


Zelle is a digital payments network backed by Wells Fargo, Bank of America, Capital One, and several other large financial institutions. It has a major advantage over the competition in that it’s already embedded in many mobile banking apps. Registering with the Zelle mobile app requires users to have a MasterCard or Visa-branded debit card issued in connection with a U.S. bank account. Unlike Venmo, which takes a couple of days to move money between accounts (instant transfers are available for a small fee), Zelle transfers money from one account to another in a matter of minutes. Another difference between the two is the average transaction amount—Venmo transactions average around $60, whereas the amount transferred by Zelle users is around $300. Banks are making a marketing push to expand beyond millennials and educate Gen Xers and Boomers about the new tool.

Currently Zelle is only for transferring money between individuals where at least one party has the app associated with their bank or credit union. While it allows associations to disburse payments to consumers, as of now there is no capability for consumers to pay for goods or services with the app. Bloomberg, however, reported in the spring of 2018 that the app is looking to enable customers to pay businesses. Even without this feature, eMarketer forecasts that by 2022 Zelle will have 56.1 million users, compared to 38.7 for Venmo and 16.2 for Cash App.

While each of these mobile payment platforms has received publicity for account security and incidents of fraud, Consumer Reports in November of 2018 rated each of them to be secure enough to use.

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