P2P payment or payment between individuals
P2P (Peer to Peer) is a model that applies to a multitude of fields and aims to allow two individuals to share data in the form of a digital exchange. In the field of P2P payment, this application translates into solutions that make it possible to exchange money digitally between individuals, regardless of their bank.
P2P Mobile payment: the majority of transfers between individuals
What is the difference between traditional inter-account transfers and new P2P transfer solutions? It has indeed been possible to transfer money from one individual to another since the end of the 1950s, hence the legitimate question as to what these new solutions bring.
First of all, the emergence of mobile payment or m-payment has been made possible by the sharp increase in cell phone equipment worldwide. A study conducted by Hootsuite and Wearesocial shows that 80% of the world’s population, or 5.19 billion people, will have mobile phones by 2020.
Initially the preserve of low-banked countries in Africa and Asia, P2P mobile payment solutions between individuals have experienced tremendous growth, which has not escaped the attention of banks and investors in the tech world who have had the idea of launching similar solutions for Western consumers.
This is how companies such as Paypal in the United States, Paylib in France and Bizum in Spain came into being.
Launched in 2013 by the banks BNP Paribas, La Banque Postale and Société Générale, Paylib is currently experiencing strong growth, driven in particular by the health crisis and the need for users to make payments and transfers remotely. One of their flagship solutions is « Paylib entre amis », a P2P transfer system that uses phone numbers rather than bank details to make transactions. With 15 million subscribers in 2020, the French fintech has convinced users and intends to continue offering a real alternative to traditional financial services.
Like the French banks, the Bizum solution has brought together almost all of the Spanish banks to offer an interbank mobile payment solution. The objective for these banks, in addition to offering relevant services to their customers, is to remain competitive with the proposals of the GAFA. The giants that are Google and Apple propose, indeed, more and more relevant financial services integrated within their wallets, especially in the field of mobile payment.
P2P payment solutions between instantaneous and comfortable to use
Another particularity of these P2P solutions is the fact that transfers between individuals are carried out instantly. It is important to remember that the traditional transfer times vary from 1 to 5 working days depending on the type of transfer (between two European accounts, international transfer…). This long delay is explained by the time it takes to validate the payment: a SEPA transfer must be verified by the issuing and receiving banks. The purpose of this validation is to confirm the banking information entered in the exchange and to ensure the solvency of the debtor account.
Far from being useless, these checks can nevertheless be a source of delay or complications if the receiver of the payment depends on the transfer. Therefore, the focus is on speeding up these delays, while ensuring the security of transactions and transfers. The ultimate goal is to make money transfers between individuals easier and faster. Previously forced to withdraw money or enter complex banking information (RIB, IBAN …) to make a transfer, it is now possible to perform this action from a smartphone with only the phone number of the recipient of the payment. By opening your phone and the relevant application, you should be able to make a bank transfer in a few clicks, which will also be instantaneous.
We are therefore progressively witnessing the democratization of financial services through the advent of digital technology, which with the technologies it brings allows us to foresee innovative and easier to use solutions for consumers.