Services for P2P payment

Business English

It seems that several companies are getting into Peer-to-peer payment business. I found two articles about it in this week.

I've known some other p2p payment other than these before.

And also some bank has it's own money transfer service with mobile.


OK, let's see the example of the square cash. This is a good example explaining how it works.

http://allthingsd.com/20131015/the-money-is-in-the-email/

As seeing this video, it looks very easy to transfer and receive money between individuals. A sender and a receiver don't need to have any accounts of this service, the only things required are an e-mail address and a bank account. At the time we send and receive money, we register the bank account.

Of course we should pay attenttions to some kind of things like a security, an insurance for frauds, etc. (I don't touch these today.)

My question is the motivation of these companies. I'm interested in the business model. Some ideas are here.

  1. Commission of transactions.
  2. Freemium model (e.g. holding account is free but using any other function would be charged.)
  3. Enhancement of their business.

As for the first idea, Some company's incentives are here. However I don't think this is the best. It would be useful that we can pay money to our friends using our mobile, however, it's nonsense to pay a commission which is several percentage of money transferred. I don't want to pay only 10 pounds with a commission of 50 pence :(

The second, I must say it's not good idea. Dealing with this kind of payment business would force the company to cost a lot to maintain security, facility, etc. The revenue would be proportionate to the number of customer and not the amount of money they spent.

The third is the possible one. They can get customers closer. As the first article says, amazon would be able to expand their customer segment. And more, they also might be able to make a deal with smaller merchants than before.

When I wes investigating these services, I felt that payment methodology is going to change. Although I've never used these services, I'd like to try some of them.