Almost every aspect of our lives has been revolutionized by the digital age. Peer-to-peer payment apps have established themselves in this regard as a reliable means of sending and receiving money. For this reason, P2P payment app development could be a profitable venture. This article includes all pertinent information, including definitions, legal requirements, features, and comprehensive guidelines to consider when developing a customized P2P payment app. Enjoy the guide!
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What does P2P mean in banking?
P2P (Peer-to-peer) transactions are electronic funds transfers that are done directly between accounts using a payment application. P2P in banking, then, refers to any financial transaction that takes place between two or more individuals as opposed to going through a bank. This includes transactions like payments and loans, which link users together on specific platforms. Online or through mobile apps is typically how peer-to-peer banking is conducted. So, how does a P2P payment app work and how to build a payment app? Let’s find more information about P2P payment app development!
How does a P2P Payment App work?
The convenience of P2P payment apps makes it possible to transfer money between users of various banks. There are many different uses for P2P systems. These apps allow you to pay for services, make online purchases, submit and accept loan requests, pay cross-border fees, and more.
When you register for an account and link it to a bank or credit card, P2P Payment App will function. Aside from that, you can send money to someone else using their email, phone, or account. Passwords or other information about a sender and a recipient are frequently used to confirm a transaction’s validity. Without using middlemen, P2P networks enable money transfers between holders of banking cards, saving you on commissions.
Most of the time, these apps are free, but there might be a few small fees depending on where your money comes from. Users must have an app that can be accessed on a computer or smartphone, as well as Internet access, in order to make payments. no bank lines or cash-related confusion. It is all very straightforward for P2P payment app development.
Keys features in P2P payment app development
Every P2P payment app development company always includes a certain set of functionality in the creation of P2P payment apps. These are the ones you ought to include in the P2P payment app development then you’re getting ready to distribute to the booming fintech industry.
1. Digital wallet
Any payment application must include a digital wallet as its core component. A user maintains his digital currency in a wallet and uses it to make payments. In order to offer a wide range of functionality, digital wallets typically interact with external systems and services as well as the payment card tokenization services from VISA and Mastercard. Before beginning the creation of your software, a separate issue called creating a digital wallet needs to receive specific attention.
2. Transfer money
The user should be able to ask for money from another user in addition to sending the desired amount of money.
3. Send bills/invoices
Your app has to have a feature that creates a transaction invoice or bill that both the sender and the recipient can accept for the user’s convenience.
4. Currency conversion
It can be challenging for the service providers to design a system that maintains things on track with 180 currencies in use worldwide so that the fantastic feature of automatic currency conversion is what makes P2P payment app development programs so well-liked, so you shouldn’t do away with it. By adding this feature, you’ll make it possible for your users to conduct cross-border business, pay for goods and services while traveling, and avoid having to think about currency conversion. Additionally, it must be done as quickly as possible to convert money and transfer funds, which is simpler when banking institutions are involved but a little more difficult when dealing with a digitized market. The ideal method to use this function is to have your payment app sync with the bank’s currency rate at the moment of the transaction.
5. Unique OTP
In P2P payment app development, unique OTP security is essential. The unique ID and OTP must be confirmed by the user in order to prevent fraudulent or unintended transactions (one-time-password). You can define the requirement that an OTP be entered each time a user logs in if you wish to offer an even greater level of protection.
6. Transfer money from card to bank account
Money transfers from one card to another and from a card to a bank account may be required by users. Give them the chance to do so.
7. Transaction history
Your users’ ability to monitor their spending and money transfers will be made possible by the transaction history. As long as you can, try to hold onto the information. The capability of creating statements, downloading, and printing transaction histories will also be a fantastic remedy.
In P2P payment app development, both you and your users will benefit from push notifications. Notifications of new offers, promotions, or changes will be possible to send. Users will also be able to read messages right away, such as when a card has been credited. Allow consumers to select which notifications they wish to get on their phones, but keep in mind that push notifications can be both helpful and frustrating.
9. Some additional features should be integrated in your P2P app
- Chatbot. Your P2P payment app’s chatbot can enhance user experience. The user can run across issues or questions when using the app. A chatbot will assist in promptly resolving any problems that can occur during fund transfers, improper wallet debits, etc.
- Fingerprint security lock. You can set up the fingerprint security lock during P2P payment app development to reduce the risks related to the security of your application. In this manner, the account can only be accessed by the owner.
- Cryptocurrency transactions. Cryptocurrencies are becoming more valuable every day. From 2019 to 2025, the cryptocurrency market is expected to expand at a CAGR of 56.4%, according to Reportlinker. Digital peer-to-peer networks are where cryptocurrency exists and functions as a form of money. It is not a data string like your typical MP3 and video files, which are copyable. Cryptocurrency is actually a record on the Blockchain, a massive global ledger. Many businesses allow customers to use cryptocurrencies to pay for their goods and services. Consider adding the ability for customers to make bitcoin payments to your modern app if you want to give them more options.
How to build a P2P payment app: Step-by-step
After discussing the P2P payment app capabilities, let’s move on to the major processes in creating your application. You must focus on developing a vision for your project and laying down precise specifications before you hunt for a development team. So here’s step-by-step how to build a payment app.
Select a P2P software type
P2P payment app development come in a variety of forms. The most common are standalone solutions and banks. You might choose to stop at one of them, depending on your business strategy, but you should be aware of all the different kinds of payment apps. We will therefore briefly describe each one.
- Bank-based solutions. Banks are one of the parties to transactions with applications that are based on banks. To increase service accessibility and convenience, many banks are creating their own P2P payment platforms. Instead of using a foreign currency account that has been saved, these apps receive money and deposit it directly into bank accounts. In order to accept these payments, vendors need to have POS terminals. Transactions are facilitated by banking apps for both users and banks.
- Independent services. These are independent service providers with unique payment methods. By using such tools, users can build a digital wallet that they can use to store money online and make purchases. Usually, MasterCard and Visa cards are accepted by these apps. If you intend to make a business out of it, you ought to pick this kind of program.
- Social media sites. Similar to what Facebook did, social media and messengers are adopting built-in payment options. Social media users can do this to give money to pals without leaving the app. This kind of P2P payment program is unsuitable for you if you do not want to create your own social network, though.
- OS for mobile devices. Payment options are more of an integrated feature than a full-fledged application in this case. Apple Pay, Samsung Pay, and Android Pay are a few examples of mobile OS payment systems.
Make a list of features for your P2P application
List the features that are required in P2P payment app building process so that a dev team can estimate the costs of developing an app. Prioritize the essential functions first, and then add the extras you want to see in your app. Studying your target market, drawing up a picture of your user, and figuring out the user flow—the process that users will follow when they engage with your app—can help you make sure you don’t miss anything.
Try not to try to build every feature at once as this may be unreasonable and overly expensive. Focus on the most important features first, and then add new ones after you are certain that they are required.
Choose the right technology
The choice of technology is the next step. You may increase the functionality and user appeal of a P2P payment app with the aid of the appropriate technologies. Don’t be afraid to use cutting-edge technologies and tools to construct your app because the quicker, easier, and more lucrative your product is, the greater the likelihood that it will be successful. New technologies are emerging as the financial sector continues to undergo digital transformation. For instance, blockchain, unified platforms, artificial intelligence (AI), and real-time payments (RTP). Don’t be afraid to use cutting-edge technologies and tools to construct your app because the quicker, easier, and more lucrative your product is, the greater the likelihood that it will be successful.
Blockchain is one of the technologies that has the most potential. Blockchain-based solutions offer a high level of transparency that consumers can precisely assess and are secure. All transactional data is kept in blocks that are linked to one another through a distributed storage system. No block can be changed or deleted without erasing the system as a whole.
The Blockchain is an unsigned online ledger that streamlines our transaction operations by using data structures. It enables users to safely alter the ledger on their own without the assistance of a third party.
In contrast to the bank’s ledger, which is connected to a centralized network, Blockchain is fully anonymous, preserving the identity of its users. Due to its anonymity, Blockchain is often used on dispersed networks as a secure method of conducting transactions. Because of the mechanism it uses, people are less dependent on transaction authentication, which gives Blockchain the ability to upend established financial systems.
The electronic record of transactions is continuously updated, checked, and stored in record “blocks.” Finally, with the aid of encryption, the parties share the meddle-proof ledger on their own computer servers.
Ensure your app has adequate security
The process of transferring money must be securely protected, as well as any account-related data and the history of your users’ transactions. How do you be sure your application has the right amount of security?
It has to do with the requirement to submit a special ID/OTP while verifying actions and logging in. This will lessen the likelihood of fraud or unintentional purchases. Try to make advantage of all the device’s security capabilities, such as the fingerprint reader, face recognition, or at the very least, two-factor authentication. Additionally, you need to protect the privacy of your users and ensure the security of your digital wallet. Make sure to go over the security features you can include in your payment application with a development team.
Security and regulatory compliance are equally essential issues. Payment standards must be followed by your payment app. Although experts claim that the FinTech industry is not sufficiently regulated, certain regions already have laws that must be taken into consideration. Unfortunately, it is very challenging to consider the payment needs of every country and develop a universal app that complies with all criteria. As a result, you should pick a location as your target market and design a P2P payment app in accordance with its laws and guidelines.
>> Learn more: Best Fintech Software Development Companies
Here are a few instances of authorities you need to interact with in order to handle legal issues by region during P2P payment app development process:
|China||FinTech Committee under the People’s Bank of China (PBOC)|
|Korea||FinTech Center under the Financial Services Commission (FSC)|
|Australia||Innovation Hub by the Australian Securities and Investments Commission (ASIC)|
|European Union||Directive (EU) 2015/2366 + GDPR|
|UK||Financial Conduct Authority.|
|US||Depends on the state|
Construct effective design
You shouldn’t overlook the design of your app in your search for legitimacy and functionality during P2P payment app development. The convenience and user-friendliness of an app for users are determined by the user interface’s proper design and appealing appearance. A memorable design will also help you increase awareness and engagement. There are various stages involved in the development of UX/UI designs. The UX part is in charge of the user’s overall impression after interacting with the interface, whereas the UI part is in charge of the appearance and feel of an app (colors, layouts, and typography).
Search for a software development team
Finding a skilled development team to work with you to bring your ideas to life is now necessary after the preliminary phases have been finished. Find and choose skilled developers by devoting the necessary time. When choosing a development partner, keep the following in mind.
- Appropriate expertise. A company’s expertise and technological capabilities must match your needs. Does a business, for instance, use blockchain technology? Has it worked on projects for FinTech before?
- Successful projects. In order to evaluate how the team is managing the work, you should first be interested in FinTech projects that are as similar to your project as feasible.
- Customer reviews. This will assist you in discovering a company’s advantages and disadvantages. It takes some work to persuade individuals to spend time writing evaluations since, in all honesty, they don’t really enjoy doing it. If a business has no reviews, it probably doesn’t value its reputation, which is a bad sign.
Test your app
Don’t forget to inquire about the testing results at the project’s conclusion during P2P payment app development. Finding bugs early and fixing them is preferable to releasing a subpar product onto the market. Testing can help you assess whether your app is functioning as intended, whether it can handle the required load, and whether it is easy to use. Test repeatedly until you are happy with the outcome. A quick checklist for testing your application is provided
- Verify the installation and operation of your app.
- Make sure a user is able to carry out common operations.
- Verify that the program functions identically across all platforms and OS versions.
- Examine the app’s performance during any special events (incoming call, low battery, airplane mode, etc.).
- Test the USB, Bluetooth, Wifi, NFC, and other hardware connections.
- To check for issues and gain user input, test the app with actual users.
- Make a decision regarding who will be in charge of supporting and maintaining the application (dedicated team, outsourcing services).
5 things to consider before you create p2p payment app
What information and considerations are necessary when it comes to how to build a payment processing app successfully and create a stellar wallet app? These are some helpful pointers that might help your P2P payment app development and achieve the greatest results.
Ensure that your application is compatible with all popular online payment methods
Your mobile payment app needs to enable the following online payment methods in order to meet all of the needs of your customers:
- Online payments for eCommerce
- Instant payments at merchants P2P transactions within the network of the system
Simply accepting the aforementioned payment methods won’t likely provide you an advantage, though. You should also consider whether to include the many use cases the aforementioned payment methods can be connected to, even the less obvious ones, in order to gauge the interest your target audience has in your app. The following features in your payment wallet software might be valued by your users:
- Using a payment plan to pay a business.
- Paying for a taxi service (with the discount calculation).
- Sending and getting a borrowing request between friends.
- Sending a comment and a borrowing request to a friend.
- Establishing a friend’s borrowing limit and permitting withdrawals up to a certain amount, a certain number of times, and/or at a certain frequency
Avoid disclosing the user’s credit card information
Any payment, even one made in cash, needs to be safe and secure to some extent. Your phone serves as your credit card while making a mobile purchase. In order to ensure user safety and security when sending money within an application, you should first incorporate a mobile payment gateway. Make it a priority to follow simple and safe app architecture when create P2P payment app.
The customers of your mobile payment app will use their phones in the exact same way to complete transactions at stores. Make sure your app doesn’t reveal their credit card information to third parties when they are completing a transaction. Create program that only sends protected code. This can guarantee your digital wallet app has a high level of security together with fingerprint identification, which is required to enable such transactions through P2P payment app development. Additionally, to stay on top of security vulnerabilities and other payment apps, implement the following measures:
- Encryption of data
- Double-factor authentication
- Compliance with other rules, including PCI-DSS
Prevent overloading your system
You can still anticipate a sizable and steadily increasing demand on your system even if the user base for your program doesn’t expand quickly. This load will eventually reach an unmanageable level and disrupt operations or just reduce the availability of your software. It would be wise to begin developing your system as a cluster solution from the outset in order to avoid overloading it. This strategy enables your system’s capacity to increase according to the system’s expanding user base.
Establish a distinct capability for synchronizing financial data
Performing a transaction in your P2P payment app development system starts a domino effect. The system is then required to update any amounts that it is tracking that have been affected by the transaction. This results in thousands of recalculations at any given moment, which might cause a system with many users to malfunction.
Try not to make your entire system chase each and every transaction that occurs in it. The likelihood of your success using this strategy is low.
The best course of action would be to build a feature that would automatically change all affected quantities throughout your system at predetermined intervals. Then, peer-to-peer data synchronization in payment apps is taken under control.
Select the best development technique available
Your monetization strategy should be focused on billing merchants, and your mobile payment app needs to be able to communicate effectively with eCommerce apps. In actuality, this is a requirement for all P2P payment app development. Prior to developing a money transfer app, think about the features you want it to offer.
- OTP and unique ID verification
- Electronic wallet
- Sending invoices and bills
- Receiving and sending money
- History of transactions
In essence, all of these features contribute to improving the user experience of making payments via online apps like Venmo. In this way, a slight delay in loading time can result in a substantially greater desertion rate and a sizable portion of unrealized revenue.
Now that you are aware of the first steps in the development of a P2P payment app, you can answer the question of how to make a P2P payment app. If you believe you are capable of providing a great application to your consumers, go ahead and start by turning your ideas for a P2P payment app into a workable solution. Don’t pass up this opportunity to have your say in the fintech sector!