Those interested in social commerce need to take note of the growing peer-to-peer payments market. Their rise in popularity is getting more consumers closer to and comfortable with purchasing products in-stream on social. We’re wondering, is this the tipping point retailers need to explode their social sales channel?
Business Insider estimated in an August 2014 report “that mobile peer-to-peer payments transactions volume could reach $86 billion in the US by 2018.” Additionally, they suggest that these services might just be “Trojan horses to gain user trust for mobile-based transactions in general” which bodes well for social commerce retailers.
Peer to peer payments is the exchange of money electronically from one individual to another directly from a bank account or credit card account for a low transaction cost or for free. It’s a convenient, mobile way to settle debts with friends without the troubles that come with carrying cash. You can find peer-to-peer payment systems right on your favorite social platforms or in the app store.
Snapchat Offers Peer to Peer Services
With Snapchat’s new cash-exchange service, Snapcash, users upload their debit card (credit card isn’t available at this time) and can begin sending and receiving funds right within the Snapchat app. Users type in a payment amount accompanied by a “$” sign and money is transferred in a matter of seconds. Users have the option to store their card securely for future transactions.
Another in-stream option is with Facebook. The company built their peer to peer payment offering right within the Messenger app. Once the users’ cards are added, money can be exchanged in an instant using the “$.”
Venmo and Dasher Hot on Facebook’s Trail
Both Snapshat and Facebook are starting with a huge user base, so we expect the fastest growth with those. But hot on their trail is money transmitter Venmo and social app developer Dasher. The two teamed up in November 2014 to begin processing transactions via messages on the Dasher platform. Their system offers the same level of ease as Facebook’s.
Square Offers “$Cashtags”
Square’s $Cashtags is spinning the market in a slightly different way by offering less personal peer-to-business transactions. With the Square Cash app, a user enters their debit card and enters their payee’s unique $Cashtag or name to transfer money. TechCrunch explains this is a good option for paying someone like a street performer without having to share personal information.
The more private $Cashtag works well in situations when you want to pay someone you don’t know well.
All of these tools and apps are reducing friction and building consumer confidence in social payment transactions. As consumers begin to trust the social applications they’re already using to make payment exchanges between friends, we believe they’ll be even more likely to splurge on the latest must-have product they’re seeing in their news feed.