What Apple’s P2P money-transfer service means for Venmo by Matt Tollerton, VP Digital Banking at Central BancompanyBanks continue to struggle in making an impact in the person-to-person (P2P) payment arena against the rival financial technology service, Venmo. As a subsidiary of PayPal, Venmo captured a very specific target market who happened to be most likely to adopt P2P, the millennials. By creating an easy-to-use, social interacting payment service, Venmo enables millennials to easily make payments and send money owed to their friends and even makes it seem “fun.” Adoption of Venmo by the millennials naturally trickled the service's popularity into the older generation, the parents of millennials.On the flip-side, banks who have partnered with large financial technology companies to integrate their mobile apps and online banking platforms for P2P services have not seen the widespread use of their platforms like that of Venmo. One reason for this lackluster attitude is the coolness and ease of use that Venmo marketed during their launch phase. This atmosphere is difficult for a bank to recreate. Additionally, with the wide range of products and services banks offer, it is simply difficult to market all of those to the degree of fintechs, financial technology companies, who tend to focus on their one and only solution. The narrow service and targeted audience of Venmo resulted in a viral adoption, “Just Venmo me,” became a largely broadcasted phrase on campuses and among millennials. It wasn't long before a young college student appeared on College Gameday touting to 'Send Money for Beer' to his @venmo account. According to Venmo he quickly received donations from more than 2,000 users.So, what's next in the world for person to person (P2P) payments? There is a new player coming to the P2P market. A well-known and trusted brand with a simplistic approach to technology. Apple announced they will be launching their own P2P money-transfer service within iMessage, giving iPhone and iPad users the ability to text money digitally to their friends and family, without the need to engage a separate app. Utilizing iMessage to send money to friends introduces a whole new level to ease-of-use. Apple users will now have the ability to send money through a text message by simply clicking an Apple Pay button within the menu of their keyboard. With a simple touch of their finger print, users can send a secure payment to the intended family or friend. Setup is easy and includes the initial load of the user's debit or credit card to Apple Pay on their device.“Utilizing iMessage to send money to friends introduces a whole new level to ease-of-use.”Will Apple's solution compete with Venmo's social usability and attractiveness? Most definitely. It doesn't get much more social than a text message followed up by a fun image or emoji after you send your payment. Venmo's social components were arguably a bit scary-many users don't necessarily like others seeing the money they send. Apple addresses this issue with their iMessage money-transfer capabilities.What does this mean for future of P2P payments? Traditional banks and credit unions will continue to struggle with adoption of their P2P services over the next few years. The process of opening a bank app to send money adds a layer of complexity that consumers would rather avoid. The simplicity will drive millennials to look at these alternative easy-to-use solutions built into the apps they are already using today. The opportunity for banks will lie in the ability to ensure their customer base adds their debit and credit cards to these new digital payment platforms. Being at the top-of-wallet or the “card on file” will now become the goal for banks as users adopt the new Apple P2P service. The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.