Friends and Family Money: P2P Transfers and Financially Fragile Consumers

73 Pages Posted: 2 Feb 2022 Last revised: 12 Dec 2023

See all articles by Tetyana Balyuk

Tetyana Balyuk

Emory University - Goizueta Business School

Emily Williams

Harvard Business School

Date Written: November 29, 2021

Abstract

This paper examines the effects of real-time payments on financially fragile individuals in the United States. Consumers rely on friends and family money to cope with negative income shocks, especially if they are liquidity constrained. Instant money transfers through peer-to-peer (P2P) payment apps reduce uncertainty in cash flow timing, enabling better alignment of income and expenditures. This transfer-expense matching in turn reduces the likelihood of negative consequences such as low liquidity fees at times when liquidity constraints bind. Our findings contribute to the active policy debate on real-time payments, highlighting their potential to enhance financial stability for vulnerable individuals

Keywords: Consumer Credit, FinTech, Peer-to-Peer Payments, P2P

JEL Classification: G50, G51, E42, G41, G21, G23

Suggested Citation

Balyuk, Tetyana and Williams, Emily, Friends and Family Money: P2P Transfers and Financially Fragile Consumers (November 29, 2021). Available at SSRN: https://ssrn.com/abstract=3974749 or http://dx.doi.org/10.2139/ssrn.3974749

Tetyana Balyuk (Contact Author)

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Emily Williams

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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