Nearly three-fifths of consumers expect their financial institutions to offer electronic person-to-person payment services, and those services with real-time capabilities can command premium pricing. These findings – included among the results of proprietary consumer research conducted in January 2001 by NYCE Corporation and Dove Consulting Group, Inc.- suggest P2P is a key product with which financial institutions can build customer loyalty and create new streams of revenue.
According to Neil Axe, Director of Emerging Network Payments at NYCE, 57 percent of respondents to the nationwide web-based survey indicated it was important that their financial institutions support a P2P service. “This clearly represents an area in which financial institutions can position themselves as progressive, while at the same time potentially bolstering their customer recruitment and retention efforts,” said Axe. “Furthermore, as customers suggest that they are willing to pay more for immediate transfers of and access to funds, it’s also an area in which these institutions can generate significant fee-based revenue.”
Axe said the price-related findings underscore the public’s perceived value of P2P capabilities. Forty-four percent of survey respondents indicated that $5.00 or more per transaction, on average, is a “fair” price to pay for being able to move and access funds in real time. In addition, 61 percent of respondents said it is “very important” for money to be accessible immediately after it is sent. According to the survey the preferred method for initiating P2P payments is a personal computer (PC) with Internet access. Fifty-six percent of consumers said they would be interested in performing these types of transactions from a PC, 38 percent at an ATM and 18 percent using a personal digital assistant or other mobile device. (Respondents could select more than one preferred device.)
Another valuable finding for financial institutions, noted Axe, is that consumers strongly prefer to use a P2P service provided by their insured depository institution rather than Internet-based providers. Only 9 percent of survey resondents agreed with the statement “I trust Internet-only providers more than my bank for this service,” versus 60 percent who disagreed. “Consumers tend to view their financial institution as a familiar, trusted entity with a `real-world’ presence. These positive associations can give financial institutions a `lift’ in the on-line world in such a way that consumers feel more secure performing transactions at their institutions’ websites than at the sites of other providers,” said Axe. “Financial institutions also have an advantage in that they are backed by a precise and long-standing regulatory structure that reaps consumer confidence.”
The NYCE research into real-time P2P payments resulted from a Web-based survey of 2,665 consumers in the United States. Respondents first completed a P2P demo, then answered a series of questions regarding the demo, as well as their payment payment preferences, behaviors and attitudes. The survey was conducted from January 2 through 10, 2001, by Dove Consulting Group, Inc., which worked with NYCE to create the study instrument.
NYCE Corporation is one of the leading electronic payments companies in the United States, providing financial institutions and retailers with shared network services for automated teller machines (ATMs), on-line debit point-of-sale (POS) and emerging real-time payment solutions. The company also provides processing services that support ATM management and monitoring services, as well as debit card issuance and authorization solutions. Through a long-standing commitment to product innovation, NYCE has established itself as a front-runner in real-time person-to-person (P2P) payment services and PIN-secured Internet debit payment solutions. Comprising 2,400 financial institution and retail ATM deployer participants, the NYCE Network processes nearly 93 million transactions per month while servicing more than 47 million cardholders through 44,000 NYCE-branded ATMs and 250,000 POS locations. NYCE Corporation is headquartered in Woodcliff Lake, NJ, and can be found online at [www.nyce.net]. (Statistics as of 3/15/01.)