How To Build A P2P Payment App: Benefits, Features & Process

Peer-to-peer (P2P) applications are the kind of digital services that are especially popular today, and rightfully so. People choose them for their ease of use and the opportunity to save time and effort, which is a must-have in our turbulent times.

Perhaps it's the right moment to meet the demand and create a mobile P2P payment app of yours: fast, secure, reliable. But where to start and how to achieve such a high-ground goal? Is it even possible? Just explore our article, where we discussed its essence, key features, development stages, examples, principles of work, and much more details to understand P2P payment application. 

Why Are P2P Money Payment Apps So Popular?

According to the survey conducted between April 2023 and March 2024, Statista indicates that 16% of the US respondents utilized their smartphones for daily payment procedures during the 12 months. 

Research and Markets present a forecast, in which it states that Gen Z and Gen Alpha will be the key target audience of P2P payment applications by 2028, while the overall spectrum of peer-to-peer payment platform users will grow to 74,4% by the respective year. 

The key reasons for the P2P payment applications’ popularity are convenience, transparency, accessibility, fast proceedings, and time preservation. 

Any eCommerce project needs a reliable payment gateway. Click here to find out how to choose the perfect solution and integrate it into your platform.

According to GlobesNewswire, the global P2P payments market size is expected to reach USD 8,078.81 billion by 2030, growing at a CAGR of 17.53% during the forecast period (2022–2030).

That's why, in recent times, the demand for P2P payment app development has increased significantly among financial institutions. In addition, the race targeted at the expansion of geographical coverage has intensified, and attempts to drive competitors out of a market have become rather frequent. Every company wants its service to join the ranks of the most popular payment apps. 

Why Is It Happening?

The thing is, the economy is gradually undergoing a conversion to digital form, so cash becomes the past. Besides, now people have more opportunities (and more reasons, such as Covid-19) to make remote purchases, which also affects the widespread transition to cashless transfers.

No wonder various companies began to increasingly implement various online payment systems, including P2P ones, which are especially pertinent to small businesses. Additionally, digital banks see an opportunity to ensure P2P payment services. Nevertheless, you should keep in mind the tech and legal risks in digital banking prior to applying any P2P payment activity.  And let’s agree: in the little grocery store (or another place of the same sort), a seller doesn't always have a terminal to accept funds with a bank card. And peer-to-peer payment solutions would help the shopper send money directly to his personal card. 

P2P payments are gathering momentum in other markets too, covering streaming, cleaning services, and property rentals.

Let's talk about digital wallets: their types and market prospects in general. Follow the link to learn each detail.

Now you know more about the trends in the mobile payments industry, and it’d be better to get back to basics. We want to be sure we're on the same page with you and clearly understand each other.

What Is a Peer-to-Peer Payment App?

P2P apps are mobile solutions intended to transfer money between cardholders, even if they’re clients of different banks. To be precise, it doesn't matter whether the users (a sender and recipient of funds) belong to the same payment system. 

As you probably know, P2P means ‘person-to-person’ or ‘peer-to-peer’. That is, the essence of these services is clear from their very name: it's about money transfer from person to person without the participation of third parties (intermediaries) - financial organizations.  

By the way, sometimes on the Internet, you can stumble upon the mention of c2c mobile services (c2c means card2card), which, in fact, are peer-to-peer payment apps.

You can freely take advantage of P2P transactions if you need to pay your rent, send money to your aging parents, or, say, share a restaurant bill with your friends, etc. However, let's outline the target audience more precisely.

The Target Audience of P2P Payment Apps:

Payment P2P app development requires defining the key individuals or parties its services will mostly suit to keep the demand for its services.

• Mobile and web P2P marketplaces. These platforms serve as a kind of intermediary between individuals - buyers and sellers of goods. And P2P mobile apps would become a great payment solution for them too. 

• Service companies (restaurants, beauty salons, barbershops, food delivery services, etc). Thanks to peer-to-peer systems, business owners would kill two birds with one stone: firstly, they'll attract new customers by offering them an alternative payment method, and secondly, they'll improve staff loyalty by allowing them to increase their income a little bit. The fact is, with the help of P2P apps, waiters, couriers, street musicians, bloggers, etc., can freely accept tips (let's say, if clients don't have enough cash).

• Organizations and people interested in non-profit fundraising. All sorts of charitable initiatives, crowdfunding, and others of the same kind would certainly find these P2P services extremely helpful. 

• Companies wishing to provide their customers with an additional service. The owner of an online or mobile platform may offer his users a special service allowing them to transfer money to each other (according to a P2P model). It's a good chance to start receiving a fee from the payment service and win the gratitude of the customers.

Hence, developing a P2P payment app is a decent solution for financial operations, considering the versatility of pay-off opportunities it provides.

How Do P2P Money Transfer Apps Work

Even the most inexperienced person would easily figure out how do P2P payment apps work: they don't require any special skills. To send money to somebody, you need to have your bank card (preferably with funds) and know the recipient’s card number. That's all, actually! But let’s explore a step-by-step process of the P2P money platform’s work. 

App Installation and Registration

When the user downloads the app, they have to create an account. The process of registration usually requires data like personal number, user name, and email address. 

Bank Card Integration

Linking the bank account or credit card is one of the key elements of a P2P payment app’s work, as it ensures further seamless financial transactions. 

Adding Contacts

The user can alleviate the process of further money transfer by adding the client’s phone numbers and email addresses. 

Money Transfer

To initiate a money transfer, the user can choose the recipient from the contact lists and insert their bank card number. Then, they insert the required sum, determining the transfer’s purpose (optionally). Finally, they enter the password to confirm the transfer. 

Payment is being processed from several minutes to a couple of days, depending on the type of transfer.

4 Main Types of P2P Payment Apps

We’ll start with the basic classification of P2P money transfers that mobile payment apps can make:

• internal transactions between users whose bank cards have been issued in the same country.

• cross-border transactions between users of different countries: fees are usually much higher, and the transfer limits are lower. 

However, we'll be more interested in another version of the classification: one that helps us answer the question: “How to create a mobile peer-to-peer payment application?”. As you'll learn later, it's impossible to implement the development process without a preliminary analysis of existing solutions. Let's explore them.

There are 4 main P2P payment app types:

Banking Solutions

The most farsighted banks decided to enter the mobile P2P payment app market and offered their own solutions to the clients. Surely, retailers must have special terminals to work with these applications, namely POS devices that can accept such payments, and this problem should be taken care of too. But the game is worth the candle, for people would definitely appreciate the possibility of resorting to banking peer-to-peer payment apps.

Independent Service Providers (ISPs)

In fact, ISPs are companies that have established cooperation with acquiring banks (banks that accept card details and process the money transfer). These banks have all the necessary licenses and access, and they’re willing to provide a ready-made service under certain conditions (usually through the API). Put the other way round; here, we're dealing with mobile solutions that resemble a digital wallet with the possibility to store funds and make P2P payments, as well as perform other similar financial operations (depending on the functionality of a particular application of this type).

Social Platforms & Messaging Services

You're surprised, aren't you? Yes, world-famous platforms, such as Facebook Messenger and WhatsApp, also decided to create an innovative payment app (or rather, they supplemented their app functionality with the P2P money transfer service). What was the reason, you may ask? Imagine you're communicating with a relative or friend, and suddenly, you recall you promised to send him or her some money. It'd be convenient for you to fulfill your promise right now without interrupting the conversation to open the person-to-person payment app, do you agree? Luckily, today, it has become possible (see below for examples of messengers offering this feature).

Mobile OS

The last item on our list is the famous couple, namely,  Android Pay & Apple Pay. The creators of the world-known operating systems also allow their users to resort to peer-to-peer networks and make contactless payments. We guess you’ve used these opportunities more than once too!

Examples of Popular P2P Payment Apps

Shifting from the types of P2P payment applications and their target audience, it’s time to discuss the top 3 popular platforms, their advantages and limitations. 

PayPal

PayPal is a globally recognized P2P payment platform. Secure transactions and the linkage to multiple funding sources are the top features that make the source loveable and recognizable among the global audience. 

The application’s advantages include sophisticated security measures, global acceptance, and cryptocurrency support. Regardless of the presented scope of PayPal’s strong features, its limitation represents the high fees for transactions and currency conversion.

Zelle

Zelle is a P2P money-transferring mobile app, available to anyone who has a Visa or Mastercard debit card account, regardless of the financial services provider. 

Zelle has numerous benefits over other market players, especially in terms of speed. Money sent via Zelle will be obtained by the recipient almost immediately (although the operation of transferring money to a bank account usually takes at least one day).

The analyzed P2P payment application is convenient due to the possibility to conduct direct transfers between the bank accounts. The advantages present effective bank-to-bank transitions, and the absence of fees for that. The limitations present Zelle’s functionality within only the limited list of banks and absence of cryptocurrency support. 

Cash App

Cash App is a P2P payment application which boosts user experience in receiving and sending financial operations. The platform’s unique feature of $cashtag is a username that alleviates finding people to pay or get money. 

The app’s advantages include support of cryptocurrency, stock trading, and the involvement of the Cash Card. The disadvantages are as follows: if the client wants to make an instant transfer, the fee will be high as compared to the other P2P payment platforms. Finally, Cash App’s availability is limited internationally if compared to PayPal. 

Another cool app of the P2P type is Azimo. And we've devoted a special article to it. Spare some time to read it!

How to Build a P2P Payment App in 6 Steps

Let's analyze the process of building a money transfer app point by point. Take a look at the basic development stages you won’t be able to do without:

1. Selection of the P2P Payment App Type

Previously in the article, we’ve described your main options in this respect. Take some time to measure up your possibilities before making a final choice related to the best way to implement your project.

2. Discovery Phase

The identified phase focuses on clarifying the project’s target audience, conducting a marketing analysis, key functionalities, and clarifying the overall scope of features the app will maintain. Here is the list of general questions you need to answer in the discovery phase:

• Who are they, your future users? What target audience is your platform focused on?

• What popular payment apps will you have to deal with and compete with? We're talking about conducting a competitive competition analysis.

• What platforms will your program support? The ideal option is to create a custom P2P payment app working with both iOS and Android operating systems.

• Etc! If you want to learn more about the important steps of the project discovery phase, read our article on the issue.

3. UI/UX

UX and UI design matters for the overall P2P payment app’s attraction and loveability. The key aspects the development team elaborate on in the UX/UI are crafting the loading speed and ensuring the platform’s consistency. Additionally, the UX/UI design phase includes working on the elements of easy navigation. 

• Loading Speed

It is well-known that users prefer speed and effectiveness of any app’s functionality. If the platform is lagging, the clients can search for the alternative. Hence, loading speed is an essential feature, the development team has to elaborate on, monitor, and improve. 

• Consistency

The element of consistency implies the correct layout functionality, so the development company has to exclude any sliding on different tools (smartphone, laptop, tablet, etc.).

• Easy Navigation

The alleviated navigation implies the crystal clear app’s functionality, so the users feel simplicity when switching from different app locations, like checking the card balance and checking the invoice, etc. 

4. Development Phase 

Development phase deals with the practical process of crafting the required technical features of the project. The initial emphasis is made on the MVP (Minimum Viable Product) model or POC (Proof of Concept). Although MVP and POC building is an optimal sub-stage, it is helpful in validating the core P2P payment app’s functionality, test, and evaluate its value proposition. 

Refraining from MVP,  the development phase promotes crafting, implementation, and checking the key functions of the P2P payment application:

• Registration. 

• General Transaction Processing.

• Security Measures. 

It would be beneficial to shed a minor light to the security measures that can be implemented to the P2P payment app. 

• Blockchain

Blockchain systems can be applied to ensure data encryption and make them immune to breaches due to the tamper-proof seal.

• Two Factor Authentication (2FA)

2FA represents a basic security measure that boosts the P2P payment application’s security. The user can insert their username and password, and then they have to confirm the entrance due to the SMS message. In some cases, this message can contain the code by inserting which user is granted access to the platform.

5. Delivery Phase (Testing)

During the delivery phase, it’s time to perform the testing procedures aimed at checking the correctness of the P2P payment platform’s functionality.

• Functional Testing

Functional testing aims to detect whether each of the developed features functions in response to the ones discussed in the discovery stage. 

• Usability Testing

Usability testing checks whether the UX/UI elements run in a proper manner, ensuring easy and intuitive operations, avoiding any interface-relevant lagging. 

• Performance Testing

This testing type aims to check whether the application will preserve its smooth and technically correct operability under the conditions of peak load. 

• Security Testing

Security testing checks whether the application protects the data and ensures confidential authorization. 

6. Deployment Phase (Launch & Maintenance)

During this phase, the owner can launch the application on the market. Then, it’s time to maintain the product through feedback analysis, platform improvement, and regular updates of the new versions or relevant features. 

Interested in peer-to-peer mobile payment system development? We're offering our services! Click here to find out why you should hire the Agilie team.

Basic Features of a Peer-to-Peer Payment Application 

So, when clarifying the steps of how to make a peer to peer payment app, it’s time to develop one. The only moment worthy mentioning is understanding what functionality your program should have in order to be able to meet competition and satisfy customers’ needs.

We're ready to share our opinions and provide several tips.

Unique ID/OTP (‘One Time Password’) 

You have to take care of data security all the more! It is for these purposes that you need to send your user a unique password or temporary PIN code (via SMS messages, emails, notifications, etc). If they confirm it, the transaction can be performed. Otherwise, certain measures should be taken. And if you want to further strengthen the protection of your money-transferring mobile app, consider sending the user such a one-off password every time he opens your program (just in case, to make sure you know who you're dealing with).

Money Transfers

Any mobile payment apps are needed, first and foremost, for safe, reliable money transfers. And remember, the whole process of transferring money from card to card shouldn’t require performing unnecessary steps. 

Money Request

Also, it won't be amiss to supplement the functionality of your service with the possibility to request money. Your users will find such a feature really helpful.

Transferring Funds to a Bank Account

Sometimes a person needs to transfer money from his card (say, those that they have just received through peer-to-peer networks) to a bank account. If your application helps them with this, they'll be very pleased. And it never hurts to please your customers.

Digital Wallet

You certainly have a wallet in which you carry your cash, business cards, and other important things, right? A similar wallet is needed for a person-to-person payment app. It would store data on the user’s bank cards, funds, and more.

Invoice Generation

Often, the client needs to have an invoice to confirm their payment (if they paid for the item and the seller wants to see proof). It means a customer must be able to generate an invoice and send it to the recipient (as well as store it in his digital wallet).

Bill Scanning

In addition to generating invoices, it may be necessary to scan the bill in order to send it to the right recipient. To do this, you’ll have to ask the user to open access to their smartphone camera.

Transaction History

Another example of the cool features of money transfer apps is convenient access to the translation history.

Money Transfer Templates

A lot of people have to make repetitive payments (say, monthly financial assistance to parents). And they would appreciate the opportunity to create the transaction template to resort to its help in the future (it would greatly simplify the entire process and help them save their time).

Notification

Notifications help the user stay up to date with everything happening in their app account: successful money transfers, receiving funds, new discounts, system updates, and more.

Mobile Chat

The chat feature would allow the sender and receiver to discuss important payment details. Of course, they can always use Viber or another messenger, but it's in your power to simplify their communication.

Support

And surely, the user must be able to contact the support team (he may face some problems when working with your service).

Key Benefits of the P2P Payment Apps

Okay, why should you choose these solutions if you're a probable user, and why create them if you're a potential platform owner? Let's figure it out!

Additional Income

First of all, let's not forget about the P2P app's monetization. There is nothing wrong with getting more money, do you agree?

Customer Relationship Improvement

Among the benefits to build a P2P payment app, in the foreground is the opportunity to improve customer relationships. 

As we’ve already mentioned above, many businesses would significantly enhance their reputation by offering their clients an additional payment channel. In the following items, we'll do our best to describe why users appreciate P2P transactions and, therefore, respect the companies providing them.

Time Preservation

Do you remember the time when it was really time-consuming to send money to another person? You had to personally visit a bank branch, stand in a queue, and perform other similar and quite boring actions. When modern online transaction services appeared, the situation became much easier, but it remained far from ideal since we still had to enter a lot of data and fill in a bunch of fields. Luckily, peer-to-peer mobile payment apps have become an excellent solution to the problem! 

They save time due to the following advantages:

• ease of use: the entire transaction process requires only a few simple steps;

• convenient interface for communication and interaction with other users;

• high transaction speed;

• great service availability.

By the way, the last point is worth discussing in more detail.

Maximum Service Availability

Peer-to-peer payment solutions are available to everyone, anytime, anywhere, because they… 

• don’t have a territorial linkage. All you need is internet access;

• don’t depend on the time factor. Transaction service is available in a 24/7 mode;

• are supported by different platforms. So you’re welcome to choose any device you like to make transactions.

Minimum Recipient Data Required

As we've said earlier, one of the benefits of a P2P money payment app is the need to know only a minimum of data about the recipient of the money transfer. This, among other things, simplifies and speeds up the transaction process.

Reduced Fees

Users also value P2P payments because the fee is usually lower than the one set by other transaction intermediaries. So, by building a money transfer app of this type, you're helping your customers save a little.

System Security

Any P2P payment is considered safe and reliable: security is ensured by the fact that the cardholder must be connected to the 3-D Secure system. Moreover, the service providing 3-D Secure service ought to have an international PCI DSS certificate.

How Peer-to-Peer Payment Solutions Make Money

As you understand now, there are many benefits of payment apps development, but let's not forget about the first one, namely, additional revenue. 

So, what options do you have?

1. Transfer Fees, the most obvious way to monetize a payment application. You, as an intermediary, get your share of the fee the user pays.

2. In-App Advertising. The main trick here is to attract the attention of advertisers and interest them in working with you. But bear in mind: users aren’t fond of ads, so don't overdo it. Stick to the golden mean rule.

3. Paid Subscriptions, which can be presented in different formats:

1. Mandatory Subscriptions, when the user, after a certain free trial period ends, should pay to keep enjoying your mobile service. A trial period is required so that users would see the benefits of your application first-hand.

2. Freemium Model, when the user has a choice: he can either use the program at no cost or pay to get access to its extended functionality. The paid version should have more features and be ad-free.

If you approach the issue wisely, you'll easily recoup the cost to build a P2P payment app and even get a steady source of good income.

In one of our blog posts, we describe the 11 best payment gateways, which can be implemented in your Android app. Click here and read about them.

Choose Agilie for P2P Payment App Development

When one decides to create a P2P payment app, it is important to consider choosing a reliable development partner to ensure its tech correctness, security, and functional sophistication. Prior to deciding on what partner to collaborate with, the following elements are important to take into account:

• years of experience; 

• areas of expertise; 

• services. 

Agilie is a fintech organization that focuses on the result-driven technically sophisticated digital solutions for the client’s needs. With 14 years of experience, the organization proved the reliability of its name as our technological advancements assist the areas of marketing, ecommerce, real estate, fintech on the multiple tech paradigms, like neobanks, blockchain integrity, cryptocurrency, etc. 

Agilie’s payment solutions development services include: 

• Payment Application

Agilie prioritizes security and trouble-free operability of its applications, so that you can get a responsive P2P payment platform for sending and receiving financial transfers of different types. 

• Payment Automation

Agilie ensures the cross-platform and native financial solutions for applications development, which will be suitable for B2B and B2C work organization by reducing the loads of paper proceeding, transforming it into a fast and correct document automation. 

• Money Transfers

By supporting multiple fiat money and cryptocurrencies, we ensure complete fund traceability no matter if it is a national or international money transfer.

Conclusion

We dedicated our article to clarifying how to build a P2P payment app by focusing on its features, monetization, and best examples. Although the basic peer-to-peer payment platform ensures money transfers, it is essential to keep up with trends to keep the project diversified. Support of cryptocurrencies, international recognition, and fee balancing might represent the decent points to pay attention to when deciding to create your own P2P payment app.

Are you ready to create a custom P2P payment app that fully suits your individual wishes? Then contact our experts, we'll be honored to take on your project!