Money Transfer Apps such as Square’s (SQ US) Cash App and PayPal’s (PYPL US) Venmo have surpassed mobile banking apps as the largest drivers of app downloads according to Sensor Tower. The site writes;
Money transfer apps are responsible for 27 percent of finance downloads so far in 2018, up from 13 percent just three years ago.
This contrasts with 2015 in which Banking Apps were the top downloads. Whilst banking apps downloads have increased with 10% since 2015, money transfer apps downloads have tripled during that time.
Source: Sensortower.com
Money transfer apps have doubled their market share over the last 3 years whilst the banking apps have lost the equivalent of their market-share.
Source: Sensortower.com
Square (SQ US) and Paypal (PYPL US) have been the main beneficiaries of this development. Their share prices are up 250% and 36% this year, and both are trading at all-time highs.
Source: Bloomberg
Source: Bloomberg
As these products get more and more traction, other could potentially enter the market either organically or through m&a. This segment of the market is definitely something to keep an eye on as there appears to be a secular shift especially amongst younger people when it comes to payments and money transfer.
