In 2024, expectations are that the total transactional value of digital payments will hit an estimated $11.53 trillion, with experts projecting that these types of transfers will display a yearly compound growth rate of 9.5% in the next four years, reaching almost $16.6 trillion in 2028. China is the planet’s hot spot for digital payments, showing a staggering $3.69 billion in transactions conducted through such methods in 2023, primarily via platforms such as WeChat Pay and Alipay.
As we know them today, Peer-to-peer (P2P) payment processors first appeared in 1998 via PayPal, the initial Web platform that enabled users to transfer money without the need for intermediaries. That refers to banks or other traditional financial institutions previously necessary to facilitate money transfers between two parties. PayPal Holdings, Inc., founded initially as Confinity, launched its digital wallet service in 1999, pioneering cost-effective electronic peer-to-peer systems that supply fast and cost-effective money transfers, which then, and now, represent, for many, a preferred alternative to more cumbersome banking processes.
Nowadays, P2P systems are often mobile apps. Still, some also function as online portals, where users fill their balances with funds or connect a bank account and then can send those funds or portions of them to other individuals signing up with the same service. Per some consumer reports, these payment options have become so popular that around 64% of Americans between the ages of eighteen and twenty-nine use them to transact with others. Below, we detail how we have reached this point and how the best choices stack up.
Why Did P2P Apps Become so Widely Used
In 2002, the world-famous Internet marketplace eBay, a revolutionary e-commerce Web platform, acquired PayPal when the latter boosted over a million daily users and processed over three billion dollars in annual payments. A year before this happened, Skrill, known as MoneyBookers then, and Neteller burst onto the electronics money transfer scene as options geared towards online gamblers. They found much success in this industry, with Neteller working with around 85% of the sphere’s merchants.
Over time, various similar e-wallets started popping up, and the next one to see major mainstream success was Venmo, launched in 2009 and capitalized on the smartphone craze in North America. It differentiated itself from PayPal by appealing to Millennials by emphasizing social media-style features, like emoji use, payment history sharing, note entries, and more. In 2013, PayPal bought out Venmo, and five years later, this processor was conducting $62 billion in money transfers among its user pool. In 2021, this figure jumped to $230 billion.
In the mid-2010s, banks were well aware of the growing popularity of P2P systems. Hence, Zelle, a mobile software that worked directly within banking mobile solutions, was birthed. CashApp also saw traction around this period, gaining prominence thanks to its integration with Bitcoin and its debit card option, which helped it attain a pool of 55 million monthly active users. In 2020, MatchPay became the newest serious entry in this arena, a processor with a heavy focus on online gaming and gambling, causing many laypeople to wonder – is MatchPay legit regarding payment processing? Which, of course, it is.
The Top US-Centric P2P Processors Compared
As noted above, MatchPay is a P2P platform that targets specific niches. It does this by connecting users who wish to buy/sell credits or digital assets. It creates a P2P marketplace for these transactions, ensuring safety by securely matching buyers and sellers and avoiding the risk of fraud. It is highly specialized for users who need to convert in-game credits or marketplace assets into cash.
CashApp enables instant transfers between users, has the mentioned debit card linked to a user’s CashApp balance, and allows stock investing. Venmo’s unique selling point is its social feed, and a wide array of merchants now accept it, expanding its functionalities beyond just P2P transfer.
PayPal has global acceptance, operating in over two hundred countries. It offers buyer and seller protection, an essential transaction safeguard against disputes and fraud. Zelle works with leading US banks and credit unions, delivering a no-fee transfer structure within partnered institutions.
According to surveys, PayPal is the most dominant P2P system in the US, used by over 186 million US adults. CashApp is in second place with close to 115 million users, and Venmo is in third place.
What Platform Is Poised For the Highest Level of Growth
MatchPay’s unique nature will probably be its greatest benefit in the years to come, seeing as it has found a home with video game fans and online gamers, two landscapes that are dramatically swelling. The first boasts a global market that pulls in $189.3 billion in annual revenue, and the second rakes in $97.15 billion in projected sector volume.
CashApp’s cryptocurrency trading feature and pull towards decentralized finance make it an appealing pick for Millennials and Gen Z, who are more likely to adopt crypto payments and send back and forward funds to each other for everyday activities.
That said, PayPal’s market position should remain stable due to its multi-currency support, buyer/seller protection, and global adoption for commerce, which have made it a top choice for freelancers working internationally.
