Peer-to-peer cash remittances as a springboard for digital payments

25 / 04 / 2016

eW blog article - The rapidly growing popularity of mobile peer-to-peer (P2P) cash transfers in recent years holds pride of place as one of the most exciting developments in m-payments & commerce.

The rapidly growing popularity of mobile peer-to-peer (P2P) cash transfers in recent years holds pride of place as one of the most exciting developments in m-payments & commerce. An Economist Intelligence Unit (EIU) survey of major European banks reveals that financial technology is radically alter the relationship between the users and providers of banking services, with 65% of the over 200 banking executives interviewed expecting further growth especially in retail P2P payments.

P2P payment services enable individual users to transfer small amounts of cash in real time – to split the bill for an evening out, for instance, or to pitch in for a collective gift – using “instant payment” mechanisms that make the transferred funds immediately available to the beneficiary, essentially doing away with the tedious and time-consuming procedures associated with bank drafts (which are still preferred for transactions entailing larger sums).

The peer-to-peer concept is not entirely new: whilst players such as PayPal have long supported cash remittances between customers, their range of service offerings has broadened considerably in the past two years, side by side with more aggressive advertising and promotional initiatives.

Italian initiatives

Italy has not been immune to the global trend, as highlighted by the proliferation of money transfer service offerings by a variety of market operators, in recent years. In addition to competing with each other, the start-ups Satispay and 2Pay, must now also face the challenge posed by Tinaba, the newest kid on the block. To counter the erosion of its market share by fintech start-ups, the banking industry has come up with its own P2P payment systems such as Zac (designed by ICBPI and adopted by the Creval Group, Veneto Banca, CSE and Cedacri), Banca Sella’s Hype and Banco Popolare’s Chat&Cash.

For users, the money transfer experience is almost identical across the board. Upon opening the relevant app, the user is required to select the beneficiary of the remittance from the mobile phone’s address book (as with all messaging apps), key in the amount to be transferred (together with an accompanying message, if desired), and press “Send”. The transferred funds then become available to the beneficiary virtually in real time.

Dedicated apps

The various services, however, differ considerably, in substance: Zac, for instance, is a function built into the payment app of banks, and the remitted funds are transferred directly from and to the bank accounts of the sender and beneficiary, respectively. Non-banking systems, on the other hand, feature a dedicated app linked to a prepaid “virtual account” that must be replenished using bank drafts, credit/debit cards or remittances from other users. Unlike other remittance services, Chat&Cash, Hype and 2Pay do not require users to hold a bank account.

Mobile P2P cash transfer services provide users with the significant convenience of sending and receiving funds at a moment’s notice, settling small debts or sharing amongst several persons a sum advanced by one of them. Since, moreover, the added convenience is provided entirely free of charge to users, mobile P2P payments seem set to gain widespread currency, although some of these new services already go a step further, enabling users to even make purchases using the same smartphone app.

No charge for users

Satispay clearly leads the Italian market in this specific segment (with 1,150 merchants accepting payment for purchases via the service, including the Grom ice-cream parlour chain, and all the TotalErg service stations in and around Milan, Como and Rome). Whilst mobile payments for retail purchases entail no charge for users, merchants are levied a EUR 0.20 fee on all transactions exceeding EUR 10.00.

While it ‘s still early days and mobile payments far from taking hold at grass-roots level in Italy, certain service providers have already set their sights on the future: SIA has recently announced that its mobile money transfer service offerings will soon be carried by several overseas banks and Satispay has unveiled plans for intense international expansion in coming months.


Simplicity, a familiar user experience, no service charges and instant gratification: none of the ingredients for widespread user acceptance is missing, as the figures amply bear out: according to the Mobile Payment & Commerce Observatory run by the Milan Polytechnic’s School of Management, although cash still reigns supreme as the preferred means of payment in Italy, digital payments on the whole rose by a significant 5.6% in 2015, with growth in the New Digital Payments segment reaching a robust 22%.

Elena Di Simone

Elena Di Simone

Head of Communication, Financial Services, Italy
Elena has been working at this company since 2011. As a spokesperson, she is additionally responsible for media contacts, press releases and other means of communication to keep stakeholders and third parties well informed about future developments of the market.