P2P payment margins under threat

Peer to peer (P2P) payments have been developing silently for a while until the largest players came into the game. Now, most major companies are entering the P2P payment arena and intend to play a growing role in this business.

However, as P2P payments are free for end users as long as they do not involve merchants, the business model has always been hard to define. P2P payment operating companies have to invest and operate information systems to run a service that does not generate any significant income. However, some side services may generate marginal income: typically operators charge their customers when they transfer money in and out of the P2P payment app. In addition, as any prepaid operation, operators actually see unclaimed balances a source of marginal income.

Now, operational costs of P2P systems are bound to increase as the GDPR (General Data Protection Regulation), an agreement regulating access to personal data in the EU and right to export such data out of the EU, is to come into force from May 25, 2018. Complying with GDPR rules will mean that operators of P2P payment systems will have to manage data according to more stringent rules and be more careful in obtaining consent from their end users. As a consequence, P2P systems operators, which are already operating on paper-thin margins, will have to face increasing costs.

EESTEL experts propose a workshop today at Trustech, titled “Workshop: Implement a GDPR Compliant Peer-to-Peer Payment Application” that will bring answers on how P2P payment operators will be able to face this challenge. The workshop, part of Trustech conference program, will take place today, November 28 at 5.30 pm, in Trustech, Palais des Festivals, Cannes. As a part of this workshop, Thierry Spanjaard, Intelling, will present a “State of the art of P2P payments at the end of 2017.”