The demand for P2P payments does not seem to be slowing anytime soon. A study released today by research firm Aite and Early Warning, owner of the bank-based P2P firm Zelle, found that P2P payments will triple by 2020.
In the U.S. alone, Aite projects “over 300% growth from 2015 to 2020—from $100.3 billion to $316.6 billion” in the value of payments transacted.
The three-fold increase in P2P payments is both an opportunity area for banks and fraudsters.
When card numbers are registered fraudulently, “fraudsters may open new accounts to serve as landing sites for the funds they steal,” the report reads. “To avoid laundering these stolen funds, banks must be more zealous than ever before in knowing their customers are who they claim to be.”
Among the North American financial institutions surveyed, 89% said fraud losses on digital channels occurred from imposters impersonating customers and successfully gaining access to their account, put another way, account take over.
“Unfortunately, the continued growth of account-takeover fraud demonstrates the never-ending need for hyper diligence around strengthening authentication,” according to the report.
One of the solutions, according to the report, is adding multiple layers of security. On this subject, the report states:
Layers of security are important because there are no silver bullet solutions that can be relied upon in all situations. Solutions that rely heavily on public data or data in third-party databases have been compromised in numerous breaches; this data is available for fraudsters to use to commit identity theft and other identity crimes.
As P2P apps gain more prominence among consumers, it remains to be seen which of the many apps consumers prefer using. A separate report ranks the various P2P players, based on user experience and other factors like payment authentication and data security, and the results were surprising.
Zelle earned a score of 50 out of 100 from Consumer Reports. It was one of the lowest scores among the payment apps tested in the survey. Apple Pay ranked the highest with a score of 76 and Venmo, Cash App (Square), and Facebook messenger scored 69, 64, and 63 respectively.
The report states:
[Zelle] was the only service that ranked below average on data security and data privacy, which were weighted heavily in our ratings. The Zelle app lacks features that keep you from accidentally sending money to the wrong person. That could happen if you mistype a phone number.
A Zelle spokesperson told Consumer Reports that sender and recipient confirmations enhancements would be available by October.
Learn more about the Early Warning and Aite report here.