Despite notable technological deficiencies in the US, peer-to-peer payments have an established presence in the country. From PayPal to Zelle, a range of players already enjoy major standing in the market—and, especially in the case of Zelle, institutional and material backing from leading banks.

But the P2P space is significantly underdeveloped, and largely a collection of walled gardens. The introduction of FedNow and Real Time Payments is an opportunity for new players to shake up the space, and a challenge for incumbents to grow their user base.

New technologies

FedNow and Real Time Payments are (more or less) equivalent technologies that can help modernize the instant payments space in the US—bringing it up to speed with India, Brazil, and other economies. Through direct account-to-account payments capacities, this infrastructure can bypass the walled gardens that have defined P2P payments through app experiences like Venmo or Cash App.

We may see incumbents forced to integrate with these new technologies over time. If customers grow accustomed to payments being instantaneously debited into their bank accounts, Venmo, Cash App, and others may have no choice but to open their walled gardens to new payment rails.

Remaining relevant

In addition to the use of instant-payment networks, P2P payment providers may see growing pressure to remain relevant by introducing features that address new use cases. Major players have already made some attempts to maintain user growth by launching crypto- and trading-focused products within their apps.

But crypto adoption has waned, and retail-investor activity is far below the highs of the meme stock craze. In the face of current macro conditions, payment leaders may see wealth-building and savings solutions function as the most promising pathways to growth.

Looking abroad

Cross-border payments appear poised to serve as a major growth vector for P2P payments in the coming years. Looking to India as a bellwether suggests that instant payments systems may soon be interconnected across borders, opening up billions of dollars—and potentially billions of customers—to new payments providers and markets.