The ‘Share Economy’ and the Rise of Mobile P2P Commerce

Navigator Edition: May 2013
By: Patrick Carroll

Electronic person-to-person (P2P) payments began in the late 90’s as the pairing of eBay and PayPal created a true online P2P marketplace. Fifteen years later, the electronic P2P payment is finding its niche in the mobile realm as the backbone behind local commerce platforms commonly referred to as ‘share economy’ applications. Services like Airbnb, SideCar, Lyft, TaskRabbit, and SnapGoods are early share economy applications that empower micro-entrepreneurs (i.e., individuals) with a platform and a network to provide goods and services to other people.

Share economy models can be pretty nifty. Are you looking to make some extra cash this weekend? Sign-up for TaskRabbit and help others nearby complete mundane tasks, like assembling newly- purchased Ikea furniture. Or sign-up for SideCar to find a group of people nearby that are looking for a ride home from the local pub. And maybe if you receive positive reviews you’ll be able to command a higher price the next time around.

The lynchpin for this commerce model, from both a logistic and business perspective, is its payments functionality. The model relies on mobile electronic payments to facilitate secure transactions between two people in real time.

The mobile functionality embedded within these applications is provided by a small group of players focused on payment processing and turnkey payment user interfaces. This segment is lead by Braintree and Stripe, which provide developer-friendly payments systems that leave the merchant account set-up and bank dealings to the processor. While this payments opportunity is relatively small, it is growing fast: recent press1 suggests that Braintree processed $1B-$2B in payments for Airbnb in 2012 alone.

The rise of the share economy model, and its reliance on mobile P2P commerce, highlights a noticeable trend across the P2P payments industry in the United States. The number of standalone mobile P2P applications, designed for consumers to whip out their phones and split the dinner bill, are simply declining. We are seeing a growing number of mobile P2P payment platforms perform as the backbone of a broader service that connects people for commerce purposes. This observation should come as no surprise given that online commerce was the catalyst for PayPal’s rise to prominence during the internet era.

Figure 1: Illustrative ‘Share Economy’ Payments Process


Source: First Annapolis Consulting research and analysis.

1 Forbes (9/12), Airbnb press.

For more information, please contact Patrick Carroll, Senior Analyst,, specializing in Mobile Commerce.

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