‘Cashing in’ on the Power of Peer to Peer Cash Apps
The number of people who carry, and are happy to use cash to pay for things on a daily basis is dwindling fast. In fact, a 2019 Fundera study found that only 10% of consumers make all of their purchases with cash and that 70% prefer card payments over cash to pay for anything.
This has meant that small retail offline retail businesses and vendors have had to adapt to those preferences, and many have, in that even vendors at flea markets and other retail events have adopted some form of mobile POS system that allows them to take credit and debit card payments wherever they might be (as long as they have Internet or a decent Wi-Fi signal).
This is a good move on any such business’ part, as study after study, including the Fundera one we just referenced, has found that when vendors allow customers to use their credit or debit card instead of cash they consistently spend more.
Which only makes sense. Where cash limits spending, card spending—especially credit card spending—opens it up. People have access to more funds, so they can buy more.
With the rise of the Millennial generation (those born between 1980 and 2000) as a retail force in every niche things are changing. They prefer to dispense with carrying debit and credit cards altogether and make use of a cash app instead. And that preference is something that small offline retailers need to better understand.
The Importance of the Millennial Dollar
Millennials are the largest generation in history, at 92 million people in the U.S. alone. Compare that to 77 million Americans who are, or were, part of the Baby Boomer generation. They are quickly becoming the main consumer force in America and beyond, and everyone is trying to figure out how to better sell to them. And to Gen Z, who are right behind them, represent even more purchasing power and have quite literally grown up with social media at the center of their lives.
The Surprising Power of Peer to Peer Cash Apps
These customers, who’ve grown up with social media, are increasingly used to making and accepting payments from peer-to-peer applications like Venmo or Square’s Cash App. If you’re not familiar, these payment apps allow consumers to pay each other, which is helpful if you’re splitting a restaurant bill, bar tab, or just want all your friends to know where you’re spending money.
If you haven’t used Venmo, it’s tough to understand what millennials and Gen X ers might have to do with cash transfers. But it’s one of the most interesting aspects of peer-to-peer payment apps. Millennials, in particular, treat them like a social media platform, kind of like Facebook, Instagram, or Twitter. They login to see what their friends are doing, not just to send them money.
If younger buyers are attracted to your retail business and its products in the first place, it’s likely that they’ll want to share the fact that they’ve spent money with you online, as well. So, accepting payments from these kinds of apps could be beneficial in two ways: first, because Millennials like to make their payment experiences social and simple, and second, because it’s free publicity when others see that their friends patronized your business.
How Offline Retailers Can Accept Peer to Peer Payments
In reality, for small vendors, accepting peer to peer payments like Venmo, Square Pay and another fast growing option, Zelle as an alternative to cash is as simple as downloading the apps and creating accounts and linking the account you will transfer the payments received to.
In terms of fees all three of the services we mentioned do offer a fee free transfer to your chosen bank account as long as you are willing to wait two to three days for your funds. Instant transfers incur a 1%-3% fee.