UK mobile P2P platform Paym reports growth in transaction volumes

These figures, together with others published by Paym last August, show Paym volumes were 2.2m txns in 2015, growing at 40%+ per quarter, or over 300% p.a.

Coincidentally, I blogged on Finextra some predictions yesterday that forecast Paym  txns to be 2m txns in 2016. I would like to say I meant 2m txns/quarter, but my sums were wrong, and at these growth rates, 9m Paym txns is a more accurate target for 2016.

Contactless card txns have grown consistently at 200% - 300% p.a. in the UK and Europe for at least 5 years, demonstrating how network effects can persist and take hold in new payment methods. I believe the same is happening with Paym, and if so, we could quite easily see over 1bn Paym txns p.a. in 2019/2020.

As evidence that this is realistic, Venmo in the US, Swish in Sweden and MobilePay in Denmark are mobile P2P services each with high volumes and growth.

Assuming the opening up of direct access to the FPS infrastructure also extends to Paym, then we can expect to see some great innovations in P2P payments and payments addressing from both challenger banks and non-bank PSPs over the next few years, as well new investments from mainstream banks as they see Paym usage grow.

One of the key benefits of PayM (which a normal faster payment doesn't provide) is that users can be sure that they're sending their money to the right person.   However, at the moment, PayM can only be provided by institutions that are directly connected to the FPS infrastructure.  Otherwise, the payment is simply too slow to satisfy the 'instant' expectation of a PayM user.  'Challengers' ought to be well positioned to take advantage of mobile technology, so it's vital that open access to the FPS infrastructure is accelerated.  If so, PayM could become the de facto method for P2P payments in the UK.

PayM still reflects a very traditional mindset - "go to a banking app to make a payment". Compare that with popular US P2P payment methods such as Venmo, which operates a its own social network, or Facebook which has integrated peer-to-peer payments into its Messenger app, or ChangeTip which works across a range of social networks. Which is more likely to appeal to the digital generation? Far from becoming the de facto standard, there is a risk that PayM will become the MySpace of peer to peer payments.

From personal behavior, I tend to agree with @TomHay. I found little value in my Mobile Banking app and uninstalled it within a few days of downloading it. On the contrary, the bill payment app from the same bank has been a Godsend and I use it several times a month (HDFC Bank's PayZapp Ends My Bill Payment Woes). Had PayZapp been a feature in HDFC Bank's Mobile Banking app, I wouldn't have bothered to go through the friction of opening the Mobile Banking app, locating the PayZapp feature inside it, all the while being bombarded by notifications that I'm not interested in.