If you’re like most business owners, you're constantly seeking ways to increase revenue and streamline operations. One way to do this is by accepting P2P payments.
P2P payments (short for peer-to-peer payments) are a rapidly-growing segment of the payments industry. More and more consumers are using peer-to-peer payment apps to send money to friends, family, and businesses.
So, should your business accept P2P payments? This blog post will define peer-to-peer payments, examine their successful uses, and help you decide if they suit your business.
What are P2P Payments?
Person-to-person payments are digital payments made between two individuals. The sender initiates the payment, and the recipient receives the funds in real time.
Peer-to-peer payments are made through mobile apps, online banking platforms, or text messages.
Person-to-person payments are convenient for both consumers and businesses. Consumers can send money to anyone, anytime, without the hassle of having to carry cash or write a check. Meanwhile, companies can receive payments quickly and easily without waiting for a check to clear.
How do P2P Payments work?
People make peer-to-peer payments with a variety of payment apps and platforms. The most popular are Venmo, Cash App, and Zelle.
These apps allow users to link their bank account or debit card to the app and initiate payments with just a few clicks.
Once they receive the payment, the recipient can choose to store credit within the app, link the app to a hosted card, or transfer the amount to their bank account.
What are Some Use Cases for Peer-to-Peer Payments?
Peer-to-peer payments serve various purposes for individuals and businesses.
For individuals, these payments are an excellent way to split the cost of dinner, pay back a friend for tickets, or send money to family members.
For businesses, person-to-person payments are effective for paying invoices, requesting customer deposits, or even paying employees.
Peer-to-peer payments are also popular for more significant transactions, such as home and car purchases. Experts expect them to continue growing in popularity, exceeding $355 billion annually by 2024.
Should your Business Accept P2P Payments?
Now that you know a little more about P2P payments, you may wonder if they suit your business. The answer depends on a few factors, such as your business type, what products or services you sell, and who your target market is.
Person-to-person payments can significantly increase sales and improve customer satisfaction if you're selling products or services to consumers. And if you're selling to other businesses, P2P payments can help you get paid faster and streamline your invoicing process.
The biggest fallbacks to P2P payments are fees and legality. Payment apps typically charge a small fee for each transaction, and there are also some legal considerations to P2P payments, such as money laundering and tax evasion. However, as long as you’re aware of these matters and take the necessary precautions, person-to-person payments can significantly increase your business's revenue and efficiency.
Contact a SeamlessChex representative to see if this avenue of payment is right for your business. P2P payments are just one way SeamlessChex helps companies to streamline their operations and increase sales. To learn more about how we can help you, visit our website or give us a call today.