Social Payments: More Than Just Splitting The Check
As awareness of person-to-person payments matures, we're getting a more nuanced understanding of the consumer needs that are driving adoption for these services, including the Popmoney® Personal Payment Service from Fiserv. In the beginning, we knew that the Popmoney service would be intrinsically "social," as it is well-suited for payments that evolve out of a social situation or an event with people that are part of an individual's social network. We envisioned that this would include things like splitting a dinner check or paying a friend back for tickets to a football game. And those kinds of casual expenses are definitely common among Popmoney users today.
What was surprising, however, was the speed with which consumers have embraced the service for more formal social expenses, such as splitting the rent. The word cloud below uses anonymous category data from a recent 3-month period of transactions on the Popmoney network to illustrate the frequency of different payment types.
"Rent" jumps off the cloud as one of the most frequent payment types. Utilities and phone expenses are also prominent – indicating the use of the Popmoney service to pay roommates back for shared bills. Paying rent, sharing bills and paying for school or childcare costs are much more formal transactions than splitting a restaurant tab. These more formal transaction types also boost the average payment amount made using the Popmoney service. In fact, the average transaction size on the Popmoney network regularly tops $400.
The types of transactions also tell us something about a large segment of our consumers – many are younger, in shared living situations and need a cost-effective, hassle-free way of settling their shared bills. Our network data and Facebook wall certainly support this conclusion.
New payment solutions that thrive are typically created to solve a specific problem. PayPal solved a problem for merchants and sellers who needed a way to receive payments from auction sales. Prepaid cards started out as a solution for people without a bank account who needed some way, other than cash or money orders, to make payments.
The problem we're solving with the Popmoney service is primarily social: giving people an easy and inexpensive way to pay almost anyone they know or owe for casual and formal expenses, no matter where they bank.
As the network grows and more payment options become available, we'll continue to see the number of payments types expand. And we anticipate that the average transaction size will decrease as the volume of payments increases. Adoption of the service through mobile apps from both Popmoney and financial institutions will also increase the number of payment scenarios that customers will use to pay others.
We're still early in the evolution of the social payments category, but it will continue to grow and thrive because ultimately, it solves a problem for consumers.
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Popmoney® personal payment services offered at popmoney.com are provided by CheckFreePay® Corporation, a licensed money transmitter, and CheckFreePay Corporation of New York, which is a licensed Money Transmitter for payment services by the New York State Department of Financial Services.
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