Are Peer-to-Peer Payments (P2P Payments)… the Future of Brick and Mortar?
The ability to accept Peer-to-Peer Payments may be in the near future! Companies of all sizes are betting big on in-store shopping, using new technology to improve the entire shopping experience. Whether through augmented reality or curbside pickup this personal and technology-heavy focus is not surprising. A recent report published by the International Council of Shopping Centers shows that 78% of polled consumers actually prefer visiting brick-and-mortar locations over shopping online. Now, imagine if customers had the ability to access and use the money sitting in their Venmo accounts to make purchases!
Setting the Scene for In-Store Shopping
We live in a world where anything we could ever want is available at our fingertips via one quick internet search. Even with all this technology people largely still prefer in-person interaction with the brands and products. It is this want for personal interaction along with our love of technology that has provided the perfect circumstances for some unexpected changes within the retail arena.
Paypal has begun to make some early moves toward Peer-to-Peer (P2P payments), by partnering with Macy’s allowing customers to use their PayPal accounts to complete purchases in-store, online and via the mobile app. Macy’s shoppers can now seamlessly shop and checkout across all channels. Paypal’s aggressive approach speaks volumes about how much the world of payment processing has changed over the last few years. Possibly, even more so about how much more it stands to change in the future.
What is the Motivation for Peer-to-Peer Payments?
Global shopping trends reveal that consumers want their favorite stores to accept all the ways they have to pay. With companies like Starbucks and TacoBell showing astounding numbers of shoppers taking advantage of mobile payment options, they are paving the way for more and more retailers and providers to join the party.
So, where is this motivation stemming from?
Millions of people have already begun using Peer-to-Peer payment accounts, many of whom have funds just sitting there waiting for an opportunity to pay someone back. Wouldn’t it be great if merchants accept those forms of payment? Both consumers and retailers see the opportunity of being able to spend/accept peer-to-peer payments.
The Road to Mainstreaming P2P Payments
There are some challenges to work through before you have the ability to accept peer-to-peer payments in your location. Using a P2P account to make a mobile purchase in-store is far different from a normal mobile wallet purchase. Mobile Wallet purchases are tied directly to a credit/debit card, whereas a P2P payment will be tied to the P2P account and only the funds already sitting in that account. New services will need to accommodate purchases that exceed the balance within a user’s account, and still allow another form of payment to complete the purchase. All of this must work seamlessly within the merchants Point-of-Sale system. Even with these cumbersome hurdles facing P2P service providers, the overwhelming want for this payment type has everyone scrambling and we could begin to see alternative payment players at registers within the next few years!
The Future of Payment Acceptance
If the Venmos, Snapchats and Facebook Messengers of the world want retailers and consumers to use their platforms for purchases, instead of the methods already available to them on their phones. Providers will need to develop relationships with businesses in order to provide offers to entice consumers, offering extra incentives to shoppers — otherwise most will likely continue using their credit cards or mobile payment options that they already know. Think of it like choosing Pandora over Shazam or vice versa; if you have one already what would it take to get you to stop using the one you already favor? It could be done right? — But the question is what would it take to get you to make the change?
TeamNPC will continue to watch this new form of payment evolve so that we are able to guide our merchants through the process. If you have questions about how you can take advantage of all the new ways people are paying and stay ahead of your competition give us a call! 419-878-0310 or Click Here and have a Team Member Contact you!