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Cash-less, card-less, and yet bankable- the peer-to-peer payment applications are here to stay. In today’s digital world, the ways we shop, work, live, and transact are massively changed to save our time and efforts. Let’s take an example of sending or receiving money straight away using the smartphone. Peer-to-peer or P2P payment applications can make it possible to pay online more conveniently and securely. Let’s understand more about such apps.
Simply put, the peer-to-peer payment applications are money transfer apps. These apps act as a middleman and help users to send/receive money to and from family members and friends. The peer-to-peer or P2P app is connected to the bank account, credit card or debit card of the users. The money transfer using P2P apps may take either a few minutes or up to three days depending on the bank regulations and prevalent money transfer standards.
In recent times, P2P app development has started gaining ground worldwide. Many startups and entrepreneurs want to leverage the benefits of such apps.
If you want to build a peer-to-peer payment app, then this blog is for you as we dig deep in the peer-to-peer app development.
As we mentioned above, P2P (peer-to-peer) payment applications enable one account holder to transfer funds to one or more than one account electronically without the need for cash or a checkbook.
In this section let’s understand how it actually works in the real world and the steps that generally people follow to make P2P payments through apps. Here are a few crucial steps:
As the market for P2P payment applications is growing at a rapid pace, users can download the most convenient P2P payment apps on their smartphones. An app can easily be downloaded through the app store or from a specific app website.
Users can create an account on the app as well as link their bank accounts including debit/credit cards. This enables them to execute tasks of transferring amounts directly through their bank accounts.
To transfer the funds to the respective account holder, thus, users need to enter account information about receipts. Information basically includes: name, account number, FNIS number, mobile number and many other details.
To initiate the transfer process, the user has to enter the respective amount they want to send and then select the receipt. There are some Online Money Transfer & Management Application accessible in the market that demand a two-step verification process as well to ensure accurate transfer to the respective person.
It is possible that some P2P payment applications charge the sender or receiver or both a fee. These charges vary depending on the app along with the type of transaction users are doing.
Just like developing an iOS or Android app, extensive research is necessary before developing a peer-to-peer payment app. Here are four common types of peer to peer payment app
Examples are Dwolla and ClearXchange. Many banks have dedicated mobile payment applications or devices that are designed to work with a specific Point-of-Sale (POS). Such apps are capable of withdrawing from or depositing into bank accounts directly. Here, the mobile network operator needs to provide QoS (Quality of Service) assurance.
Examples are PayPal, Square case. These apps offer both online and in-person P2P payments either in the bank accounts or in the stored currency accounts. These apps have an eWallet feature by default that makes it convenient for the users to either store money or send it to their peers. It is fair to mention that these apps have no support or backing of any banks. Users in developing countries can leverage the benefits of this non-bank model.
This model works wonders in developed countries where the well-established infrastructure for payment in place. Tech-savvy customers or users embrace this model willingly. This model works on tokenization and fingerprint authentication to ensure a safe and swift transaction.
Examples are Square Cash and Snapchat. Social media-based payments are useful for sending frequent payments to our contacts. These apps do not require stringent authentication for initiating a transaction because usually such transactions are done among regular contacts.
In recent years, P2P payment applications have gained a lot of popularity worldwide. In many regions, they are more popular than bank payment apps. As per the survey conducted by eMarketer, peer-to-peer transactions using mobile phones is expected to reach $612.23 billion by 2023 in the US alone.
Just like a mobile wallet platform, the P2P payment app also needs the user’s registration using a mobile number or social media accounts. Once the registration is verified, users can add their bank details and credit or debit card information. However, standalone payment apps like PayPal do not require you to add bank information immediately.
It enables users to send the invoice or bill to the person who is going to make the payment for specific products or services. What’s more, the peer-to-peer payment app should generate the invoice and send the same to senders and receivers.
This feature shows a summary of all transactions on a weekly, monthly, and yearly basis. Every digital payment solution provides this feature to its users. This feature adds convenience as the users can check the transaction history without leaving their homes.
Ticket bookings, due dates, loyalty points, and many other details can be given through push notifications. This is one of the most important features of the peer-to-peer payment app. The push notifications also notify the users of every payment-related activity.
The integration of digital wallets can make the P2P app a complete digital payment solution. This feature replaces the physical wallets and users never lose their money and ATM cards. Even if the user loses the smartphone, it is possible to access the digital wallet from other smartphones or devices. The user’s unique ID and password can protect the amount every time.
The finance app development integrates the unique identification or OTP feature in your P2P payment app. This feature sends a unique ID or One-time Password (OTP) to verify every transaction so that the user can confirm it before the amount gets deducted from the wallet or bank account. Some P2P payment apps ask for OTP during every login.
Though the Peer-to-Peer app is developed as a strong and safe option to the traditional banking system, many such apps enable users to sync their bank accounts. When the company or entrepreneur wants to build a peer-to-peer payment app, they tend to stay away from enforcing any change from the traditional way of banking, and therefore, they give the bank account syncing feature in the app.
This feature notifies the user when a payment is initiated or received. In brief, whenever any change in the user’s digital wallet occurs, they will get the notification. Also, the mobile app development company can integrate customized alert systems to notify the app users about the upcoming bill payment dates, so they can get rid of remembering important dates.
The peer-to-peer payment apps should be capable of handling international transactions. Here the biggest challenge remains is the variation in the currency rates. It is necessary for the app to convert the user’s money in a foreign land.
However, once this feature is provided, it can help people get rid of visiting currency exchange centers frequently. This feature also enables users to transact as per their budget.
Chatbots are aimed at answering queries of a user. Integration of smart bots works as a virtual assistant on a 24/7 basis. The user may want to know many answers before initiating transactions or even registering in the app.
The chatbot is designed to provide quick answers that will enhance the user’s satisfaction and the users remain loyal to the P2P payment app for a long time.
This type includes app security, PCI DSS Compliance, and currency conversion challenges. Features like Touch ID, fingerprint recognition, and two-factor authentication can make the app secure. Also, the P2P mobile application can send instant notification to the users when their money gets transferred or deducted.
This type includes regional or country-wise limitations, jurisdiction-related challenges, and mindset-oriented issues. Mostly, non-technical challenges occur because many people still do not want to share their confidential financial data online.
Peer-to-peer networks are highly secure and more reliable than centralized systems. What makes them secure? The answer is Blockchain technology. The cross-border payment is the biggest weakness of P2P transactions.
The blockchain technology can make this process swift and secure. However, the mobile app development company needs to put some effort into giving cross-border transactions a blockchain advantage. Also, the future of peer-to-peer payment apps will be interesting as cryptocurrency and blockchain technology can be integrated.
Also, the hourly rate of developers is the deciding factor. You can get a P2P payment application with necessary features at $30000 from India because the hourly rate of Indian developers is around $30 to $70 an hour, which is way less than the same of the US-based app developers.
The trend of peer-to-peer payment application gains traction of financial institutions and people alike. As a robust and reliable money transfer solution, this app can take your business to the new level by generating a new stream of revenue. If you want to come up with a customized P2P application, the time is just right as the world rapidly switches to the online payment method.
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