P2P firms are moving beyond traditional offering to increase scale and boost profits

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Global P2P mobile money transfer segment is experiencing steady growth in recent years. In 2014, transaction value of this segment was USD 19.5 billion with a consumer base of 210 million. It is expected to rise to rise to USD 302 billion with 1.9 billion consumer base approximately by 2019. Domestic transfers currently have higher user base than international remittance with lower transaction amounts. There has been rapid transformation this segment due to technological innovation and entry of smartphones. As mobile financial services are becoming popular, charges related to P2P payments are reducing steadily. Under such circumstances companies find it beneficial to diversify into other business line for revenue generation. This has reduced charges for transfers and players are now moving away from traditional service line in order to boost revenues.

• France based start up Lydia has introduced an app based card that is acceptable at every retail joint with MasterCard payment option. The company had started off with P2P payment app and currently has a consumer base of 5 million. It functions through SEPA transfers for withdrawal from Lydia wallet which usually takes a few days. The company plans to introduce a card with initial charges of USD 11.15 as issuing fee and monthly rental of USD 4.45 for immediate withdrawals. It will support NFC based payments, ATM withdrawals and cross border payments. However, this service will remain optional. Lydia app synchronizes with MasterCard network for providing updates on transactions instantaneously. Also, there is no overdraft limit and no bank account is required for the service.
• P2P firm TransferWise from UK plans to reduce its dependency on banks by obtaining financial licenses by itself. This is likely to facilitate more freedom for the company and it can diversify its service line effectively which became restricted with bank partnerships. With a customer base across 50 countries globally, it bagged an investment of USD 58 million through venture capital firm Andreessen Horowitz last year.

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