While conceding that the domestic person-to-person market is an attractive one, The FRB of Atlanta believes that many banks are missing an opportunity to deliver a new and distinct service to their customers. P2P has been an area of much recent experimentation, both inside and outside of banks. Early results suggest that P2P actually comprises multiple kinds of payments, both in transaction size and transaction purpose, each of which will have their own distinct risk/reward characteristics. As a result, the market will remain confused about appropriate pricing strategies until senders, recipients, and the financial institutions themselves sort out the variety of use cases.
“While it appears that the migration from paper checks to electronic forms of payment in the consumer-to-business market is crossing over to the P2P market, banks still have many hurdles to clear before they can capitalize on the P2P opportunity,” says Douglas A. King, FRB Atlanta payments risk expert.
Read more at: http://portalsandrails.frbatlanta.org/p2p/