P2P payments and the importance of referral marketing

We held a few focus groups here at Mapa recently, and covered the topic of person-to-person (P2P) payments. One topic made me think about the power of referral marketing. The question was: Would you sign up to a new digital service if it made it easier to pay friends (and get money from them) more quickly?

While the digital banking geeks here at Mapa would jump at the chance to try any new FinTech (especially as we’ve recently branched out into Digital Wallets & Payments), our focus group members were far more guarded in their responses:

“Why can’t my own bank just make it quicker to do?”

“I wouldn’t trust a third party as much as my main account provider.”

“I don’t pay friends for things all that often…”

“It all sounds great until your contact doesn’t have the right tool [to receive the money]. Then it all falls apart.”

“These companies need to be universal to work – and that will never happen. As soon as there’s a market, competitors appear – so we won’t all be using the same technology.”

The solutions innovators are offering, generally, make it possible to pay someone simply with a mobile phone number, straight from your smartphone.

Revolut lets users make really quick payments to their contacts – IF they have Revolut. Within the same part of the app, unsurprisingly, Revolut has added the option to ‘Invite friends to Revolut.’


Monzo does something similar. While sending money to (or receiving money from) a fellow Monzo customer is not only a breeze but a joy (emoji notes make my DAY so keep those payments coming), it all takes a bit longer if they don’t have the app. That’s why, when I navigate to Contacts, I am first presented with a list of my friends who do have Monzo, and then everyone else below – with a button to INVITE them. In the same place (because no marketing zone is wasted!), a reminder appears that I have a ‘Golden Ticket’. This is how (loyal) Monzo users help their friends skip the waiting list for a Monzo card. Some beautifully executed referral marketing tactics.

As the (lovely) copy here notes: ‘Monzo becomes even better once all your friends have joined.’


And as Tom Blomfield said recently, ‘When you have a great product that people love, they tell their friends about it because they just want to share the good news. This is powerful. But when you combine this with the network effect, where the product becomes more valuable the more users there are, this is accelerated further.’

What these new banks know is that, while everyone can happily use different banking providers and go about their lives without much fuss, when it comes to making payments to one another it would be easier if we all used the same tools. We remember that every time we go to try and make a P2P payment. So they use that opportunity to help us market their products for them.

Of course, the power of referrals won’t work every time. We know from our focus groups that many people simply cannot be bothered to download a new app, even if it means a delay in getting money they are due.

Arguably, and luckily, Monzo and Revolut offer numerous features (find out more in our Mobile Banking Dashboard) that would make a customer rave about them. They are showing incumbents how to make people love rather than tolerate their digital banking platforms. So reminding me to remind others, at a useful point in the journey, is genius on their part.

Referral marketing is not new, but it’s got a whole lot slicker. Because both brands are app-based, they just need my friend’s mobile number in order to send them a personalised link to download the app or sign up. And, with a focus on product over marketing, challenger startups like these are in a great position to enjoy the power of word-of-mouth.

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