Consumer-to-Consumer Transfers In The U.S.
Aite Group predicts that account-to-account (A2A) transfers will account for US$60 billion by 2008, up from US$19 billion in 2005. Aite Group urges financial institutions to expand the range of payment services offered through their online banking applica
Boston, MA, April 26, 2005 – In a new report, Consumer-to-Consumer Transfers In The U.S., Aite Group provides an overview of the various mechanisms used by consumers to transfer money to other individuals within the U.S., and makes suggestions to banks on how to better address the C2C opportunity.
Domestic consumer-to-consumer money transfers represent a sizeable opportunity for banks and other electronic payment providers. In 2004, 96% of all non-cash domestic consumer-to-consumer money transfers were made by checks and money orders. Of all non-cash C2C transactions, only 1.5% were initiated over the Internet, and 1.7% by prepaid cards.
In 2004, gift cards with US$54 billion represented the largest category among the electronic payment methods used for C2C transactions, followed by online bill payments (US$31 billion), A2A (US$12 billion), money transmitters (US$9 billion), and email transfers (US$2 billion). By 2008, gift cards will still represent the most dominantly used form of electronic C2C payment methods, with US$94 billion in transactions, followed by online bill payment (US$77 billion), A2A (US$60 billion), money transmitters (US$16 billion), and email transfers (US$5 billion).
"The end game with consumer-to-consumer money transfers is not merely replacing checks by electronic payments, but generating fee income and increasing customer retention. It is also about driving considerable business process enhancements, such as with instant online account opening and funding" comments Gwenn Bézard Research Director with Aite Group and the author of the report.
The report profiles four vendors: Aliaswire, Cashedge, Corillian, and Teknowledge.
This is a 15-page Impact Note. Clients of Aite Group's Retail Banking service can download the report.