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Are Peer-to-Peer Payments the Future of E-commerce Payment Solutions?

Posted August 15, 2017


Categorized Electronic Payments

Multitudes of Americans and other global citizens who have spent little or no time exploring the world of B2B e-commerce payment solutions might ask the title question.  According to a just-released report from the MIT Sloan Management Review, 60 percent of digitally maturing companies report that embracing digital technology is core to their business.

"Digital maturity goes beyond technology, and is about how businesses are adapting in a digital environment. To wit: Are they fundamentally changing what they do and how they do it in order to compete effectively?"

Inertia and Digital Peer-to-Peer E-commerce Payments

By way of reference, the following chart compares the transportation industry's adoption of digital technology to other sectors.

Sector Early Developing Maturing
All 34% 41% 25%
Transportation 45% 31% 24%
Banking 34% 39% 28%
Logistics 39% 46% 15%


Understanding that peer-to-peer e-commerce payments are only one aspect of digital technology, it is reasonable to assume that those sectors that are considered developing or maturing at least include digital peer-to-peer payments. This represents more than 55 percent of companies in each of the above examples. E-commerce today exists in an environment where digital transformation, in general, has already overcome the force of inertia.

The Trickle Down of New Technology

There are always leaders and followers in the realm of adopting new technologies. The mature lead adoption, followed by those in the process of developing, which in turn draws those in the very early stages of development to pick up the pace of adoption as well. It is common knowledge that when the world's leading retailers implement new technologies that affect their supply chain, they drive those changes through the supply chain from top to bottom. Initially, they require compliance or adoption by all Tier One suppliers. A little farther down the road, the requirements are extended to Tier Two suppliers, and so it goes.

This pattern is not limited to advances in technology. Take, for example, the imposition of international quality standards on companies of all sizes and types. Several decades ago, what was then referred to as "The Big Three" automotive manufacturers insisted that all of their Tier One suppliers become registered to the ISO 9001 standard. The penalty for failing to comply was losing status as a preferred supplier, or losing the supplier relationship entirely. The hook was that, in order to maintain the ISO quality standard, Tier One suppliers needed to ensure that their raw material and component suppliers were also ISO compliant.

The Real Peer-to-Peer Payment Resistance

Despite this trickle-down pattern, there is always a certain amount of resistance to new methods and technologies. This holds true in the peer-to-peer payment realm as well. The reason for resistance can be summed up in one word: trust.

Five years ago, the popular catchphrases were "The Collaborative Economy" or "The Disruptive Economy." Now Deloitte has coined the term "Trust Economy" in reference to peer-to-peer e-commerce transactions. With a subtle acknowledgment of Uber's cashless operations, Deloitte notes that:

"The trust economy developing around person-to-person (P2P) transactions does not turn on credit ratings, guaranteed cashier’s checks, or other traditional trust mechanisms. Rather, it relies on each transacting party’s reputation and digital identity—the elements of which may soon be stored and managed in a blockchain . . . In the trust economy, an individual’s or entity’s “identity” confirms membership in a nation or community, ownership of assets, entitlement to benefits or services, and, more fundamentally, that the individual or entity actually exists (and) making it possible to share information selectively with others to exchange assets safely and efficiently."

The Deloitte report, published in February 2017, predicts significant global investigation and acceptance of blockchain technology "in the next 18 to 24 months." It is already happening. If it were not, you would not be reading this article.

The more that companies come to trust blockchain technology, the less resistance there will be. Trust at high levels will not only engender trust at lower levels, it will also drive trust at those levels. As has been pointed out, it will drive implementation.

There is more to this equation. The populace at large did not care about ISO standards in the automotive business. They still do not care. However, the public does seem to be welcoming digital e-commerce payments with open arms. Refer, for instance, to the Uber example. Customers never tender cash, credit, or debit cards. Drivers never get a paper pay check. The "Trust Economy" is being accepted and driven both from the top down and from the bottom up.

Peer-to-Peer Payments Have the Necessary Momentum

Do not bother Googling "peer-to-peer payments." On the other hand, take this into consideration. A search of the Near Field Communications World website returns 147 technical articles specific to peer-to-peer payment solutions published between March 2010 and June 2017. These are articles by which anyone can easily see evidence of the kind of progress made over that period.

Want more evidence? A Bank of America report reveals:

  • One-third of all Americans are already regularly using P2P payment solutions.
  • Nearly half of Millennials, Gen Xers, and Baby Boomers say they will use peer-to-peer e-commerce payment solutions before the end of 2017.
  • Forty-four percent of those survey said they would be comfortable transferring digital payments of $1,000 or more.

The top four reasons for ready acceptance of peer-to-peer payments are:

  • Time-saving convenience
  • Used by friends
  • Offered as an option
  • Do not want to use cash or checks

Now for Something Really Amazing

Referring to the same Bank of America report, the belief of those surveyed concerning the future (i.e., what the world will be like for children currently under the age of 10) was that:

  1. They will not know how to write a check (said 71 percent)
  2. They will not use physical credit cards (42 percent)
  3. They will shop primarily with a smartphone (36 percent)
  4. They will only use virtual currency (24 percent)
  5. They will not know what cash is (14 percent)

What was that question again?

Granted, this article is directed primarily to fleet management use of peer-to-peer e-commerce payment solutions. However, the question asked cannot be adequately answered by looking only at transportation and logistics. This is not an industry-limited change. This is a sea change of tsunamic proportions. It is enveloping the entire world in every sector and at every level of commerce.

Nonetheless, having demonstrated that digital P2P is not only here, but here to stay and here to pervade, fleet operators and managers must be vitally aware not only of the emergence of digital commerce, but also its current state, its accelerating rate of adoption, and its eventual universality. Embracing peer-to-peer e-commerce payment solutions may be the future as this material is being written. By the time you read it, it could be the norm.

If your company has not investigated or invested in the adoption of leading-edge payment technology, it may soon be trying to hang on to the trailing edge. Be wise. Digitize.

Not sure of where to start? We can help with that. Why not take a moment today to contact a sales representative? 


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