If anything good has come out of this pandemic, it is the acceleration in the development of technology and digitalization to best suit our needs. Not to say that the Coronavirus brought any technological boom because we have all been living a technology-dependent life somehow for at least the past ten years. What the pandemic has done is brought us to speed with our most immediate needs so that we can have them sorted with the help of scientific know-how.
One such drastic development has been in peer to peer payment apps. Most of the world was already hopping on the digital payment freight but there were and still are a significant portion of the people who preferred hard cash. With the unfortunate implosion of Coronavirus and mandatory self-care social distancing and quarantining rules, it entailed, our perspective on the way we make and receive payments changed considerably.
Now, most of us prefer to keep our money in our bank accounts and make or receive payments directly through P2P payment apps. It is more convenient, easier, and saves one the time and effort of having to stand in long queues outside an ATM. Since most of us have already been managing our finances through our smartphones and laptops, it makes sense to have payment apps in our gallery.
Two of the most popular P2P apps, Stripe and CashApp, have seen massive growth during the pandemic and understand that digital payment methods are here to stay.
Stripe recently announced a $600 million in funding bringing the company’s private valuation to $36 billion. The latest investment comes from Andreessen Horowitz, General Catalyst, GV, and Sequoia. Stripe enables businesses to make and receive payments online and aims to “increase the GDP of the internet”. According to the inventor of Stripe, the problem with the payment apps lied in the coding and design of the app.
Patrick and John Collison spent two years designing and developer-focused instant setup payment platform that any company could use. Apart from its A-class investors, Stripe makes money by acting as a toll collector. The app charges a 2.9% swipe fee for customers plus 30 cents of every transaction done on the app.
Stripe is also venturing into new areas of finances with its lending arm called Stripe Capital. Announced in November, last year, Stripe Capital is aimed at providing online companies money to facilitate their growth. Stripe Atlas, another Stripe platform that founds and registers new businesses, saw a 220% rise in new companies being registered compared to last year.
Square, too, showed a better than expected growth in its quarterly results, thanks to its P2P platform CashApp. Although the Coronavirus has the economy reeling, reports suggest that consumers are sticking to peer-to-peer payment service apps and online payments. CashApp allows you to send, receive, spend, save, and invest money without having ties to a bank account.
“Our Cash App ecosystem delivered strong gross profit growth of 167% year over year as we scaled our network to more than 30 million monthly transacting active customers in June,” the company wrote in the report, adding “We remain focused on helping Cash App customers access our broader ecosystem of financial tools, including Cash Card.”
Square revealed that CashApp saw more than 30 million users in June 2020, which is a significant rise from 24 million in December 2019. One of the reasons behind CashApp’s user surge is that the app enabled users to receive their US stimulus via CashApp accounts. Moreover, CashApp also offers further services such as direct deposit, Bitcoin investing, and Cash Card.
Cash Card is one of the primary features that Cash App users could avail. CashApp users can apply for a personal debit card from the app. The card works in all the same way as a typical debit card. You can use it to shop at any merchant and withdraw money from ATMs. It even comes in black and white colors and an option to have your initials engraved on the card.
Apart from all the features and services, both Stripe and CashApp offer their customers the advantage of managing their finance from their smartphones. Since the Coronavirus has enforced social distancing and lockdown norms, both small businesses and individuals are enjoying the convenience of P2P payment methods. And even after the pandemic is over, the P2P payment and online payment methods are only going to get bigger and better.