Apple Pay's growth drivers remain unclear (AAPL)

But, as is standard for Apple, these statistics are reported without key context, like transaction or volume statistics, which means that the only takeaway is that the product is growing quickly.

Apple’s lack of context makes it hard to assess what’s driving its growth. We can glean that, with such a high total, the product likely started out small and is continuing to scale. But it seems that the growth is coming more from entry into new markets versus increased volume among existing users.

Apple needs to push for ways to reinvigorate Apple Pay interest, particularly in light of rumors that the service is struggling. Acceptance network growth, which the firm highlighted, could help by making it easier for users to form habits. Transit integration could be another possibility. But what Apple really needs is a new feature that will keep users coming back to Apple Pay. Peer-to-peer (P2P) payments could be the ticket, particularly in light of new rumors that Apple has entered talks with major payments players about offering a service that could rival Venmo. As mobile P2P becomes more popular in developed markets, it’s plausible an Apple Pay P2P service could have a carryover effect in building in-store purchasing volume.

Peer-to-peer (P2P) payments, defined as informal payments made from one person to another, have long been a prominent feature of the payments industry.

That’s because individuals transfer funds to each other on a regular basis, whether it's to make a recurring payment, reimburse a friend, or split a dinner bill.

Cash and checks have historically dominated the P2P ecosystem, and they’re still a popular tool. But as smartphones become a primary computing device, top digital platforms, like Venmo and Google Wallet, have enabled customers to turn away from cash and make those payments digitally with ease. Over the next few years, though overall P2P spend will remain constant, a shift to mobile payments across the board and increased spending power from the digital-savvy younger generation will cause the mobile P2P industry to skyrocket.

That poses a problem for firms providing these services, though. Historically, most of these players have taken on mobile P2P at a loss because it’s a low-friction way to onboard users and won’t catch on unless it’s free, or largely free, to consumers. But as it becomes more popular and starts to eat into these firms’ traditional streams of revenue, finding ways to monetize is increasingly important. That could mean moving P2P functionality into more profitable environments, leveraging existing networks of friends to encourage spending, or offering value-added services at a nominal fee.

Jaime Toplin, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile P2P payments that examines what’s driving this shift to mobile P2P and explains why companies need to find a way to capitalize on it quickly. It discusses how firms can use the tools they have to gain in the P2P space, details several cases, and evaluates which strategies might be the most effective in monetizing these platforms.

Here are some key takeaways from the report:

In full, the report:

Interested in getting the full report? Here are two ways to access it:

Apple Pay's growth drivers remain unclear (AAPL)

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