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P2P payment

What is a P2P payment app?

P2P (peer-to-peer) payment is a service that allows one user to make a transaction (paying bills, sending money to another, etc) using an app or website. These apps are linked to users’ deposit accounts or through one’s debit card, allowing the transfer of funds between two parties using their individual banking accounts or credit cards.

P2P is flourishing due to the convenience of being able to immediately and safely send and receive funds, pay bills, and make purchases anytime, anywhere. The convenience, speed, and ease-of-use remain at its forefront of strength. 

What does a P2P payment app do?

P2P payment apps are often equipped with the followings:

  • Enabling payment to a landlord or a merchant who is on an installment plan.
  • Making payment for taxi or cab services along with applied discounts.
  • Settling the balances when money is borrowed from a friend or a relative.
  • Setting a borrowing limit for anyone and thereby allow them to withdraw some amount at a specific time or predefined intervals.
  • Transferring money on any borrowing request from the people you know (typically from within your contact list)
  • Splitting the bill amongst multiple people, especially for expenses like dinner, outings, trip payment, etc.
  • Transferring money to your loved ones instantly.
  • Making payment for utility bills, services, etc.

P2P app allows money transfer beyond the geographical boundaries as well. There are a few P2P mobile app solutions explicitly aimed at making such transfers that enable you to send money outside your friends and groups. It is divided into:

  • P2P cross-border money transfer apps: There are P2P payment platforms solely created for international money transfer. Such international P2P money transfer apps make remittances cheaper. It is a promising new market aided by smart technology that makes cross-border money transfer secure and faster than before.
  • P2P FX: Users from across the globe come under P2P foreign currency exchange as they negate the middlemen like banks and brokers. It leaves a tremendous impact on clients as they end up saving around 90% of the money that goes into payment of transfer fees for international exchange.
  • P2P lending apps: A remarkable P2P payment solution assists users in need by offering to repay microloans at cheaper interest rates. Users also find this as a lucrative loan option sparring the tedious bank processes and availing money at lower interest rates. Again, investors who build such a mobile payment system find it profitable to monetize their funds.

It is the technology within P2P payment apps that allow users to make transfers without the need to go to a bank. Also, it enables sharing money from multiple sources like a bank, credit card, and even escrow who works as a non-banking agent.

Reasons to create a custom P2P payment app

To start a custom P2P payment app development, you should find the motivation to do it, of course. Otherwise, why not use off-the-shelf solutions? Let us give you some benefits of custom P2P apps that may convince you:

Illustrating your unique selling point: You can offer users something unique and out of ordinary in your custom P2P payment app that people won’t find in other services. A custom solution may provide you with features that will meet all the requirements of both your business and your customers, which will not only fuel your performance by adhering to the core values and differentiating you from your competitors in the mind of customers.

Low cost: There are no intermediaries in P2P payment. All transactions are made electronically, directly from sender to recipient, that is why there is no need to use third parties, and transaction fees are meager very low, or there is none at all.

Strong transparency: Many users like transparency in P2P mobile apps. For example, if you need to exchange currency, you will likely find a reasonable rate in the P2P payment app since it is determined by overall demand, not by banks or governments.

Good security: As a rule, all P2P payment apps are secure enough. Since it is financial software, developers usually add a few protection layers to encrypt transfers and make sure that malefactors will fail in their attempts to steal money.

Overall, having a custom P2P will allow you to amplify these benefits better, taking full control of how the customer experience is going to be like and earn 100% of the revenue generated from it.

Types of P2P payment apps

When you have been recalled with all reasons and benefits to build a P2P payment app, let’s review all the types of such apps and their particularities so that you have a good starting point of how you can leverage it to your advantage in the future:

Bank-based services: Today many banks provide clients with P2P apps that simplify payment processes. But, in turn, merchants should have appropriate hardware like PoS terminals that can accept payments. Dwolla and Zelle are good examples of bank-centric P2P apps.

Standalone vendors: Independent services like PayPal or Venmo provide users with an electronic wallet where they can perform P2P payments using their banking cards. Usually, all independent services support Visa and MasterCard card types, but it depends on the particularities of each P2P service. Standalone services allow users to keep their money if they don’t want to withdraw it to a banking account yet.

Social-based apps: It may be surprising, but social media platforms we use for chatting and image sharing also allow us to send payments. The matter is that users sometimes want to send a specific sum to their friend directly from a messenger. Thus, social media apps may also be used for P2P payments. For example, WhatsApp launched its P2P payment system in India, which already became very popular. Facebook in 2017 also introduced Fundraising via Live, allowing users to use P2P payment integrated into the platform to donate to individuals or organizations they advocate. However, this type will unlikely to be preferable for you only if you don’t want to build your social media app and add the P2P payments feature.

Mobile OS systems: And the last type in this list is not less popular P2P services like Android Pay or Apple Pay. And it is not even an app, it is an integrated feature of the device. Cheap Android devices or old iPhone smartphones don’t support NFC technology, and it means that contactless payments are impossible. But such P2P systems make it possible to send money only to other users of Android or Apple Pay, which is inside the system. Or to pay for purchases at shops where PoS terminals are equipped with NFC technology.

In a word, bank-based and standalone are two more widespread types, so you would probably want to focus on one of these models. However, that doesn’t mean the other types are any less of a powerhouse – you can always enter the market through a niche path and take advantage of its large room for growth. Which one to choose depends on the characteristics of your business and your entry strategy. 

Basic features for P2P payment apps

To provide users with flawless quality, your customized P2P payment system should include a few must-have features.

User digital wallet

A digital wallet is a space for a user where they can keep their funds and cards data, make electronic transactions, and so on. A user digital wallet also includes other features that we will list below. By the way, if you need a mobile wallet as well, we may provide you with a comprehensive guide.

Send and request money

Everything is simple – users should have the capability to send money or request the required amount from other users.

Billing and invoice generation

You need to add the capability to use the camera to scan bills and then send them to other users. Besides that, person-to-person payment apps should make it possible to generate invoices as well and submit them.

Push notifications

Notifications pop up on the main screen of a mobile device when any activity occurs. For example, new funds are received, or it is the due date to pay bills. Also, if there are new special offers or discounts, a user will be notified.

Bank transfer

Users may transfer their funds to a banking account or card using your P2P mobile payments.

Admin panel

This feature is required for you as the owner. Developers need to create a web admin panel that will allow you to manage the app, edit, remove, and so on.

The issue with this feature is the relevant exchange rate. The point is, current banking conditions make instant transfers, let’s say, overcomplicated. Hence this problem arises.

Your solution may vary depending on the platform and banking system you are using. We recommend you to make a mobile payment app that synchronizes the exchange rate with the bank at the moment of transaction. Just make sure you notify users about it to avoid misunderstanding.

Modes of payments

To fulfill the requirements of each customer, you should offer as many options as you can. Therefore, make sure that your app necessarily supports the following payment methods:

  • Payments within your system.
  • Online payments for e-commerce.
  • On-the-spot payments at shops.

These methods are necessary and essential. Often, trying to figure out how to make a P2P payment app developers forget to cover all the payment needs of the user. So if you want to get more customers, think about additional modes you can incorporate into your app. For example, here are some other cases when people might need to use a P2P payment application:

  • Paying out the installment plan.
  • Paying for taxi services.
  • Setting a limit for a friend who borrows money from a user. A friend must be able to withdraw the allowed amount of money for the permitted number of times. It’s a handy feature for parents and kids.
  • Sending an invoice or a borrowing request.
  • Transferring money with a comment.

User data anonymity

Creating the payment layout makes sure the receiver of the payment doesn’t see the credit card details of the user. Also, always add security features like fingerprint identification. You must make your P2P payment app as safe for the user as possible. Otherwise, you risk that your customers can get their banking details stolen because of the lack of protection in your app.

Transaction history

None of us can remember all the transactions we’ve made. So make sure your app shows users their activity, and try to store this data for as long as possible. Also, it will be helpful to allow customers to download the statistics and overall info of their financial activity. Another useful feature will be to show the user their income and spendings. You can present the spendings as a pie chart that will show where and how the money was spent.

If you don’t add this function, the app will become quite inconvenient, and users will abandon your app.

Unique one-time passwords (OTP)/ IDs

It is a handy feature in terms of security. All the mobile financial apps should send a unique OTP or ID upon the transaction for the user to verify it additionally. It can protect the customer from thieves and make sure that money wasn’t sent by mistake. To reinforce security even further, you can make the app send an OTP each time the user logs into the system. If the device has an integrated fingerprint scanner, it may confirm a transaction with fingerprint scanning as well.

Chain reaction remembrance

While processing a transaction, a P2P payment system causes a whole chain of events. The payment prompts an app to track and recalculate all the amounts and changes caused by the transaction. Also, if this system has numerous users, it can translate to thousands of recalculation, resulting in the shutdown of the system.

So if you try to make your app chase every payment, you can get a system overloaded very quickly. Thus, it would be more logical to create a capability that can adjust all the impacts across the system at the time intervals you set.

Chatbox and Chatbot

A chatting feature will be good if users need to clarify specific details concerning payment, and they can do it directly in P2P payment apps. Besides that, it will reduce the number of possible mistakes. 

Plus, you should integrate a chatbot into your chat functionality. A chatbot that can answer user questions might help your customers feel safer and served. It is a straightforward feature to add, but it can make your payment app look more humane and attentive to the user.

Synchronous data update

If you are planning to scale your app, it must be able to handle countless transfer queries in no time. This is why there is always a place for performance improvement.

One of the ways to reduce the server load is to save data in temporary storage. The system can update the main database with the specified interval, let’s say 1 minute. It reduces the server load substantially and brings minimum user experience losses.

Must-have steps to build P2P payment apps

You cannot skip this section since it is crucial and you must read it. It describes all steps you should undertake if you want to create a reliable P2P payment app and gain the lead.

Step 1: Choose P2P payment app type

First, you need to choose the type of your P2P app. As we noted above, standalone and banking services are the most popular types. So you need to make your choice.

Step 2: Prioritize mobile platform

If your budget is limited, you can start with one mobile platform – iOS or Android. Later, you can order the development of one more app version for another platform.

Step 3: Draw up the features for the P2P app

Apart from MVP features that P2P payment apps cannot function properly without, you can add other features that your app needs to make it unique. Everything depends on your requirements.

Step 4: Consider all security issues

This point is especially important since you need to keep up with all security issues to protect the app and make it reliable for users. This helpful article will also describe to you how to secure data from cyber attacks.

  • Add security features: That is, all integrated security features in mobile devices should be activated. Fingerprint scanners, face recognition, and other technologies should be used. However, if a user’s device doesn’t support it, two-factor authentication should be activated at least;
  • Two-factor authentication: Apart from the password required for authorization, it is necessary to have one more authentication factor like SMS with a verification code, for example.
  • PCI-DSS compliance: Payment Card Industry Data Security Standard or PCI-DSS for short is the standard that should be followed if you build a FinTech app. That is why you should ensure that your P2P payment app complies with all 12 requirements of the standard. Your app should get a PCI-DSS certificate. To know more, check the official website.

Step 5: Build a user-friendly interface and UX

UI and UX of your P2P payment app should be attractive, intuitive, and simple. Users don’t want to waste time working out how everything works – it should be as clear as possible. So don’t complicate UI/UX, make it minimalistic.

>> Should read: The Ultimate Outsourcing Guidee <<

Step 6: Conduct proper testing

And this step is also essential. QA engineers should perform all necessary types of testing to ensure everything functions properly. Moreover, you can even find a team of volunteers that will perform beta testing of your app. It will help you fix all bugs at an early stage.

But there is one crucial step you cannot bypass – regulation compliance.

P2P payment app legal compliance

P2P payment apps, just as any FinTech app, should meet the financial regulations and standards of the region the app is developed for. And a person-to-person payment system is not the exception. 

  • APAC region (Asia-Pacific): If you create an app for the Asian sector, then you need to get approval from the FinTech Committee under the People’s Bank of China (PBOC) if your target market is China, FinTech Center under the Financial Services Commission (FSC) if your market is Korea. To put the app on the Australian market, you will need to solve legal issues with Innovation Hub by the Australian Securities and Investments Commission (ASIC). In Vietnam, additionally, you must obtain a Certificate of Registration for participating in the fintech regulatory sandbox in order to join the sandbox and must act accordingly during the test run of the app. 
  • US Region: It is a much more complicated situation with the US region. The matter is that there are more than eight federal agencies that are engaged in regulatory compliance. Moreover, the US has 50 states, and each state has its financial regulations. Thus, you need to consider if your market is the USA.
  • Europe region: European Union regulations concerning FinTech apps and P2P payment apps, in particular, are described in Directive (EU) 2015/2366. Apart from this, all apps that process the personal data of EU-based citizens should comply with GDPR rules. Our detailed guide will explain to you everything on how to make your app GDPR-compliant.
  • UK Region: The FinTech market of the UK is regulated by the Financial Conduct Authority.

As you can see, this process is rather complicated and time-consuming. But you should make sure that your business is legal and compliant with all regulations.

Challenges to consider and deal with

There are some pitfalls you should take into account to give users a better experience and improve customers’ loyalty.

Geo limitations

Different regions have different rules and regulations, and it is impossible today to build an app that will match all financial standards. So there are certain geographical restrictions that must be taken into account during the app development process.

Disputes settlement

Sometimes troubles with transactions may appear. When a sends any money amount to another user, and the recipient doesn’t receive it. And the technical glitch may be the reason for it or some other problems. What should they do? Your P2P payment app should have the availability of financial support where the special department will sort out this issue and settle the dispute to return all funds to the recipient.


A P2P money transfer app should be credible. Not all people feel comfortable using mobile payment services, especially if they are new. They feel better using conventional cash. So you will need to work hard to attract more users and convince them of the trustworthiness of your app.

In case you are looking for a partner that could help you solve those challenges and make fortune with a custom P2P payment app,  feel free to contact us – a tech consultant who has been in the industry for 11 years and has been verified for an innovative mindset, strong commitment, and outstanding skills. We promise to not only deliver the best banking ideas to accelerate your business but are also capable of translating those initiatives into a seamless, comprehensive, and competitive package of solutions.

Contact us via: 

  • Phone: +84 24 3202 9222
  • Hotline: +1 408 663 8600 (US); +612 8006 1349 (AUS); +84 32 675 2886 (VN)
  • Email: [email protected]


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