This mobile payment company is transforming P2P payments by using blockchain technology

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Peer-to-peer payments are nothing new, as "Venmo me" has become colloquial when splitting a restaurant check. But one company is trying to change the P2P payments game by utilizing blockchain technology.

Abra announced today that its smartphone app is now available on Android and iPhone in the U.S. Users can download the app, fund their Abra wallets immediately with their bank accounts, and send money completely free to other users by just entering their phone number.

But what makes Abra different from Venmo and other P2P payment apps?

“We’re trying to make it possible for the first time to send money between any two phone numbers in the world,” founder and CEO Bill Barhydt told Business Insider. "Venmo, PayPal, etc. physically take possession of your money, and that's an untenable proposition at a global scale."

So Barhydt went back to the drawing board a few years ago and rethought the problem from scratch. That led to the major idea behind Abra, which is to allow a consumer to hold digital cash on a smartphone for the first time with no third party holding their funds.

Of course, this generated an important question: How do you guarantee the value of a transaction in that case? Abra's solution is to take Bitcoin and the blockchain technology that underlies it to effectively fix the value of the digital cash in fiat currency in real time without the need for a financial intermediary.

"That has the beautiful property [of introducing] interesting models for getting money on and off the phone in the first place," Barhydt said.

To make money more accessible to consumers, the company is launching a new network of "Abra Tellers," or "human ATMs," individuals or businesses who earn money by buying or selling digital cash to and from any consumer through the Abra app.

Abra has already launched in the Philippines, which Barhydt called a "good fertile launch testing ground." The nation was an excellent test market because it has a variety of consumer types and heavy smartphone penetration, which allowed Abra to test every aspect of its platform in a real-world environment.

Abra now joins a growing list of ways for people to send money to one another, and time will tell if the integration of blockchain technology into this process will change the process in the way the company expects.

John Heggestuen, managing research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report that explores the market for P2P payments, how they work, and the types of businesses that are offering these services and why. 

Here are some of the key takeaways from the report:

• We estimate that US annual peer-to-peer (P2P) payments — informal payments made from one person to another — reached over $540 billion in 2014. These payments were made by cash, check, digital money transfer, or other means.
• Mobile P2P payments are having a huge impact on this informal economy and diminishing the need for cash and checks. We forecast that mobile P2P payments will grow to $174 billion during the same period. That means that 30% of P2P volume will be paid via mobile, up from 1% last year.
• There are four types of businesses making major moves in mobile P2P payments: social messaging companies, banks, card networks, and other payment companies. Each of these types of companies has its own objectives and strengths in offering mobile P2P payment services which we explore in the report.

In full, the report:

• Forecasts the value of total and mobile P2P payments made in the United States through 2019.
• Explains the networks that P2P payments providers use to move value from one person to another.
• Analyzes why mobile P2P apps are seeing such a rapid uptake among millennials and other demographics.
• Explores the disparate objectives different companies hope to achieve by offering these services.

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of P2P payments.