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You’re probably reading this post because you’re curious about the benefits of creating a P2P payment app. You’re in the right place if that’s the case.
This article is designed to help startup founders, FinTech executives, financial organizations, product managers, and serial entrepreneurs fully understand the purpose and benefits of P2P payment applications.
Before we get into that, we have a question: Have you ever wondered what you would do if you lost access to your smartphone? Quite a scary thought, no? Just think of all the daily tasks we do with our smartphones. We can not only communicate through texts and calls but can also start a car, lock and unlock doors, and have immediate access to our finances.
P2P and Finance
The digital revolution has had an impact on the financial services industry, just as it has on other sectors. We no longer see individuals using banking entities for different money transactions. Instead, people are leveraging online peer-to-peer (P2P) payment applications.
Mobile application development companies are working towards deploying comprehensive P2P payment solutions for various small and large-scale businesses.
But how are users responding to such fintech advancements?
Well, 94% of millennials are mobile payment app users, compared to 87% of Gen Zers, 88% of Gen Xers, and 65% of baby boomers, reported in a study by Nerdwallet.
Mobile payments are the new reality… People are opting for a card-free, cashless economy and utilizing order-in-one-click technology.
With all the hype, you might not know whether you should develop a P2P payment app or not.
This blog will surely help to solve the buzz and answer your questions.
Why Are P2P Apps Acknowledged Widely Nowadays?
When you set out to create a payment app, you redesign financial technology, allowing users to pay money using P2P payment apps, cryptocurrency platforms, wallet applications, and m-commerce apps.
Peer-to-peer payment apps are critical for accelerating and optimizing various mobile payments such as bill splitting, trip booking, remittance sending, and even expense management.
It’s a no-brainer that more than 62% of American millennials prefer P2P mobile payments because of its efficiency, convenience, and security.
Here are a few quick reasons for the widespread popularity of P2P payment applications.
You may already have a general understanding of the appeal of P2P payment apps given how far you’ve read. Before we move ahead to other details, let’s do a small recap before you’re ready to invest and move ahead with your own payment app development.
What Is a P2P Payment App?
Peer-to-peer payment, also known as the P2P payment app, is a digital platform that allows users to transfer money to peers (friends, families, and even retailers). P2P applications are practical because they allow for direct, instantaneous money transfers between users.
Since COVID-19 took over the world, people have been more inclined towards the idea of cashless banking, a more hygienic option with no physical cash involved. Payment apps allow the user to connect and load an e-wallet with money from their bank account or credit card, enabling cashless transfer to friends or retailers.
Is PayPal the Only Viable P2P Payment Solution?
The earliest digital payment platform that facilitated P2P money transfers via email is PayPal. Even now PayPal is in the game as a popular payment option, but the FinTech revolution has seen some new competitors who are offering distinct features with P2P transactions at its core.
Some notable examples to have emerged over the years are Venmo (PayPal), Zelle, Google Pay, Apple Pay and Cash App.
Is P2P Better than A2A?
According to a report released in July 2019, over 1 million internal transfers occurred in that month alone in US financial institutions. This makes up 67% of all the money movement that month.
The surge in P2P payments continued, while A2A (Account-to-Account) payments between accounts at different financial institutions also rose, with 2.35% of active digital users digitally transferring funds between accounts at various banks and credit unions.
An overwhelming majority (77%) of those transfers came from smartphones. For credit unions, this is another strong indicator that mobile app development and enhancements are becoming a must-have for members.
The ability to split the restaurant check, submit your monthly rent, or reimburse for something easily without cash is becoming more of a necessity. P2P payments allow you to send someone money easily from your bank account using your mobile phone.
As a result, apps like Venmo have gained momentum.
The Biggest Reason to Develop a P2P Payment App for Your Startup or Business…
By developing your own P2P payment app and incorporating third party vendors to allow both P2P and A2A transactions easily, you are further securing member loyalty. Having your own mobile app also allows you to cross sell opportunities as P2P payment users will stay in your mobile app rather than move to a different application for similar capabilities.
Types of P2P Payment Apps
Before you start with the payment app development process, let’s consider the most popular types of such apps. It’ll help you understand the requirements and finalize the concept:
Standalone Services
This P2P payment system comes with an in-built mechanism that enables fund transfer. It has a mobile wallet feature that helps users store money before sending it to a bank account or another app user.
Multiple legal requirements must be met in order for this to function because user money is directly held and used to facilitate online payments.
Bank Centric
Bank-centric applications involve banks as third parties for fund transfers. This type requires an API from a bank or credit card company. It moves the money from the users’ bank accounts rather than from platform accounts when transferring.
Social Media Centric
This platform inculcates the payment system into the social media app. As a creator of a social media platform, you might instead think about developing API-based solutions that can link to various social network accounts.
Should I Invest to Develop a P2P Payment App?
Is all the hype about P2P payment apps really worth it? We’ll leave that for you to decide. All we can do is list a few points that would help you consider the investment. Let’s have a look…
We hope that the information we have shared here has given you confirmation about the viability of the idea.
P2P Payment App Stats
Here are some interesting figures to make things more transparent and open the path for you to develop a P2P payment app:
P2P is all about having a better way for people to pay other people, and at its very core, it must be easy while being trustworthy, secure, and instant.
There are several technical, security, and legal hurdles that must be overcome during the payment app development process.
CitrusBits works with mobile app design and development for various solutions, including mobile payment applications. With our focus on leveraging mobile technology, we help businesses overcome constraints that may disrupt their progress.
You can get in touch with us and discuss the possible solutions to develop a P2P payment app, which can be easily integrated with your business.
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