A Look at P2P Payments

Posted by Alison Arthur and Tiffany Taylor on 02 Dec 2021

Awareness and adoption of digital payments are at an all-time high. Mobile phones, connected devices, and other emerging technology all contribute to increased consumer demand for speed, efficiency, and convenience. Person-to-person (P2P) payments are becoming more popular as consumers switch from physical payment methods like cash and credit/debit cards to digital alternatives, especially in the post-pandemic economy.

P2P payments were first made popular by payments giant PayPal, which made it possible to transfer money to other PayPal users via the web or mobile devices. The market soon expanded to include similar services from Google, Dwolla, and others, but PayPal continued to dominate the space. Now, Venmo and Zelle® are among the most popular brand names in the world of P2P payments. Here’s a closer look at both solutions.


Launched in 2009, Venmo quickly captured attention by offering users the option to send and receive money via bank accounts, debit cards, and prepaid cards without incurring a fee. Since its introduction, Venmo’s mobile-centric approach and social component have made it a front-runner in the P2P payments space.

Venmo was acquired by payment service provider Braintree Payments in 2012 before PayPal absorbed the parent company in 2013. Venmo has 361 million active accounts and is on-track to generate $900 million in revenue in 2021.


The success of P2P payments platforms like Venmo spurred innovation from the banking sector as well. Individual banks long offered their customers the ability to send and receive money to and from other customers; however, due to lack of centralization, none of these services were formidable competitors for solutions like PayPal.

A bank-owned consortium, Early Warning®, launched its own P2P payments solution in 2017 named Zelle. It uses alias-based authentication of account holders via email addresses and mobile phone numbers to connect users and facilitate near-instantaneous money movement without fees. As of Q2 2021,1700 financial institutions are signed on with Zelle, representing 74 percent of all U.S. DDA accounts and $120 billion worth of payments sent over its network. 

What’s Next for P2P?

In an age when people might be more likely to carry a smartphone than cash and cards, P2P payments are a viable digital alternative to traditional payment methods—and demand only continues to increase as consumers demand more contactless options. These solutions make it easy for consumers to split a restaurant check, pay a friend back for a concert ticket, or send a monetary gift. But P2P solutions are expanding beyond person-to-person payments. Zelle offers a disbursements solution as well as a solution for small businesses. And Venmo is expanding its reach into merchant acceptance and diversifying with its branded debit card. The next phase of P2P may see these solutions emerging as holistic payment solutions that can benefit both consumers and businesses.

Read more about P2P in P2P Money Movement—The Retrospective You Didn’t Know You Needed.

*This is an update on an original post published October 2019

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email

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Alison Arthur Product and Content Marketing Manager Alison creates timely product marketing and thought leadership content that keeps Alacriti's community informed on the latest developments in billing and payments technology. With a background in payments and financial services, Alison specializes in composing content related to technology, security, compliance, and overall industry trends.
Tiffany Taylor Blog Contributor Tiffany Taylor is a technology marketing professional with broad expertise in a number of marketing disciplines and financial technology expertise including payments, retail and digital banking, core processing, and lending. As the owner of Tiffany Taylor Marketing, Tiffany brings a well-rounded perspective to FinTech marketing and creative content development.

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