Square is maturing (SQ)

The firm processed $13.6 billion in gross payment volume (GPV), up 33% year-over-year (YoY), and revenue grew as well.

Square’s intensified focus on larger retailers is paying off.

And as Square barrels forward, it’s learning how to manage that scale, too. Initially, as Square began to focus on larger clients, its take rate, defined as transaction revenue as a percentage of GPV, fell too, likely as a result of measures like processing credits or lower transaction fees that the firm sacrificed to gain these clients. But more recently, the firm’s take rate began to stabilize, and in Q1 2017, it went up, indicating the firm’s improved ability to scale without sacrificing profitability. And at the same time, losses across the board are down YoY. This managed growth points to a long runway among the firm’s target clientele, and puts it healthily in line for growth moving forward.

Peer-to-peer (P2P) payments, defined as informal payments made from one person to another, have long been a prominent feature of the payments industry.

That’s because individuals transfer funds to each other on a regular basis, whether it's to make a recurring payment, reimburse a friend, or split a dinner bill.

Cash and checks have historically dominated the P2P ecosystem, and they’re still a popular tool. But as smartphones become a primary computing device, top digital platforms, like Venmo and Google Wallet, have enabled customers to turn away from cash and make those payments digitally with ease. Over the next few years, though overall P2P spend will remain constant, a shift to mobile payments across the board and increased spending power from the digital-savvy younger generation will cause the mobile P2P industry to skyrocket.

That poses a problem for firms providing these services, though. Historically, most of these players have taken on mobile P2P at a loss because it’s a low-friction way to onboard users and won’t catch on unless it’s free, or largely free, to consumers. But as it becomes more popular and starts to eat into these firms’ traditional streams of revenue, finding ways to monetize is increasingly important. That could mean moving P2P functionality into more profitable environments, leveraging existing networks of friends to encourage spending, or offering value-added services at a nominal fee.

Jaime Toplin, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile P2P payments that examines what’s driving this shift to mobile P2P and explains why companies need to find a way to capitalize on it quickly. It discusses how firms can use the tools they have to gain in the P2P space, details several cases, and evaluates which strategies might be the most effective in monetizing these platforms.

Here are some key takeaways from the report:

In full, the report:

Interested in getting the full report? Here are two ways to access it: