Money moves faster now. Consumers can decide to send or spend money and seconds later actually do so—for example, by reimbursing a friend for an Uber before it even arrives, or buying something online with just Face ID on their phone. Gone are the days of dialing customer service numbers on the back of L.L. Bean catalogues to place an order. Peer-to-peer (P2P) payments and other mobile options have transformed the consumer experience of transferring money with enhanced security and speed. Incumbents have a strong grasp on this market, with Zelle powering most major banks’ P2P platforms and eclipsing Venmo and Cash App in payment volume. Meanwhile, in terms of retail spending, digital wallet integration on mobile devices, merchant partnerships and buy-now pay-later (BNPL) continue to transform the shopping experience. Firms, both fintechs and incumbents, are now competing to improve payments with faster, simpler and seemingly more fun options.

P2P in particular had made transferring money easier and more pleasant. Zelle, Venmo and others allow consumers to send money to one another with just a phone number or email address, bypassing the much slower ACH network, which requires knowledge of the recipients’ account and routing numbers. P2P firms also aim to make payments feel more like posting to social media than writing a check. Venmo’s interactive P2P payments feed embodies social media elements—users can like and comment on payments, and make friends with each other—while Cash App has orchestrated a viral campaign using social media platforms like Twitter and Twitch.

These two mobile screenshots show Venmo's social media-like home screen and Cash App's QR code capability
Venmo Home Screen and Cash App QR Code Screen

P2P firms are trying new ways to make payments even simpler. Zelle stands out for its integration with nearly every incumbent bank. Several firms, including Bank of America, U.S. Bank and Wells Fargo, have recently added QR code scanning to their mobile apps, adding a layer of error prevention and simplicity for payments—users don’t need to worry about sending money to the wrong person because of a typo. Cash App and Venmo have offered QR codes for some time.

People also like getting credit card reward points while still splitting the bill with friends, and firms are working to make that possible. American Express and Venmo/PayPal partner to offer a unique Send & Split feature that lets credit card holders send money to and split purchases with friends or family who have a Venmo or PayPal account. American Express card holders can select a transaction to split and get paid back directly to their American Express card as a statement credit while still earning rewards for the full amount of purchases.

These three mobile screenshots show Wells Fargo's QR code option and American Express's split the bill feature
Wells Fargo QR Code Screen (left) and American Express Transaction Details Screen Split It Option

Beyond P2P: Firms want to make all payments easier

Firms are also looking for ways to improve the payment experience between people and merchants. Incumbents and fintechs alike have built out several ways to position themselves as the primary payment option:

  • The ubiquitous Pay with PayPal button lets users expedite online checkout just by logging into their PayPal account and approving the purchase
  • Venmo is expanding the reach of its Pay with Venmo online checkout option; the firm announced a partnership with Amazon, and already lets users pay with Venmo for Grubhub and DoorDash purchases, among others
  • Revolut recently unveiled an online checkout feature; UK and EEA merchants can now present Revolut Pay as an alternative payment method to PayPal and Apple Pay
  • Google relaunched its Wallet app for Chrome and Android, which can provide temporary virtual card numbers and suggest autofill at checkout
  • Discover and Capital One let users spend their cash back directly at Amazon checkout, displaying the reward balance and providing a field for which to enter a value or spend the entire balance
These three mobile screenshots show payment options from three online merchants
Chrome, Doordash and Amazon Payment Options

Buy-now-pay-later (BNPL) firms fall into the fold here as well, letting consumers receive a loan within the checkout process:

  • Affirm and e-commerce platform Shopify—which services transactions for over 1.75 million merchants—let users set up payment plans for large purchases right on the spot, at checkout
  • Klarna and Affirm have both recently launched BNPL physical and virtual debit cards on the Visa network, meaning that users can spend money before setting up a repayment plan; both firms offer four interest-free payments that can be retroactively applied
This screenshot shows a Nike checkout page and the ensuing Klarna buy now pay later options
Nike Checkout with Klarna Page and Lightbox

Firms also partner with social media companies to offer in-app payments

Social media payment integration is also becoming an industry trend, with several industry players adding checkout and e-commerce features:

  • In 2019, Meta—previously Facebook—launched Meta Pay—previously Facebook Pay—which serves as a P2P and payment platform for WhatsApp, Facebook and most recently Instagram, where users can now purchase products from a seller through the Chat function
  • Pinterest also launched new merchant shopping features, which include product tagging on pins, a Pinterest API for Shopping and a Shop tab for business profiles
  • Twitter introduced Twitter Shops, a feature that allows users to browse products on a merchant’s Twitter profile and redirects them to the merchant’s website to check out—although this feature currently appears to be nonfunctional under Twitter’s new ownership
  • TikTok recently partnered with Stripe to introduce a Tips feature enabling viewers to pay content creators
These two screenshots from mobile devices show payment options on Facebook Messenger and Twitter
Facebook Messenger’s Payment System and Twitter’s (Possibly Defunct) Payment System

Block, meanwhile, is building tighter integrations between Cash App, Square and Afterpay:

  • In September 2021, Block launched Cash App Pay which lets users pay Square merchants with their Cash App balance via a QR code or a button at checkout
  • After acquiring AfterPay in August 2021, Block added Afterpay deals and shopping functionality to the Cash App app
  • The firm recently expanded Cash App Pay partnerships to all merchant partners; previously Cash App Pay was only available to Square merchants
  • Block is currently rolling out Cash App Pay availability to Afterpay sellers as an integrated payment experience

Recently, Klarna has expanded its services in efforts to become more than just a BNPL lender, such as with the launch of its open banking division Klarna Kosma as well as the introduction of in-app budgeting tools and loyalty card wallets. The recent addition of a delivery tracking and history dashboard, Klarna is taking another step toward becoming an all-encompassing payment and shopping service.

These two mobile screenshots show Cash App and Klarna app screens
Cash App and Klarna Screens

Incumbents and disruptors alike aim to avoid the middleman where possible. Firms and users want to save money on fees, and firms want to drive user engagement through merchant partnerships and deep integration between the P2P and shopping experience. With the use of sophisticated algorithms, the infrastructure of digital technology has the potential to not just cater to, but to drive and fundamentally alter the way people send and spend money.

For more on how fintechs and others are altering the financial services industry, check out our Insights section. And learn more about how our Fintech research services can help your organization.