How to Choose a P2P Payment API for Peer-to-Peer Transfers?

In this age of AI, digital payment applications are proving as a boon for organizations as well as for users. Digital technology is a deflationary force in an inflationary economy. Hence Digital payment applications like Peer-to-peer payment apps have turned the tide and made a sheer impact in transforming fintech. Peer-to-peer payment apps often known as P2P payment, let people transfer money to friends, relatives, or other people within a few clicks. The correspondent payment application is safe, secure, compliant, and convenient for all classes and sizes of organizations as well as individuals.

P2P payments apps account for a sizable portion of the digital payments market nowadays due to the rising popularity of smartphones. The apps like Google pay, Paypal, Paytm, Alipay, and Venmo are the most downloaded P2P Payments Apps Worldwide.

Let’s read some of the statistics related to the P2P payments app:

  • According to Statista the most popular payment app worldwide currently is PayPal with 426 million users, generating a revenue of $25.3 billion dollar in the year 2021 and expected to gross by 6% in 2022.
  • In the past few years, the total value for mobile P2P money transfers has grown to 55% and reached about $120.38 billion.
  • In 2019, the non-cash transactions alone in restaurants had reached 69%.

What is a P2P payment app?

A peer-to-peer payment is done by an electronic exchange that is made from one individual to another by the usage of a P2P payment application. These applications make the individual user gets connected to another user’s digital wallet. During the exchange, the P2P application records the transactions and pulls the cash from one user’s ledger and sends it to another.

Digital payment has been so advanced that it doesn’t require a human presence and makes the cash flow seamlessly. This is due to development and emergence in smartphones that had made further progress and adoption of peer-to-peer transactions.

The peer-to-peer mobile apps target the below audience:

Self-employed/freelance professionals

Self-employed professionals such as photographers, designers, graphic designers, content writers, mobile/web developers, and subject specialist tutors are hired for performing specific work. These experts usually collaborate with companies to provide their specialty and hence these P2P money transfers can be very useful for them.

Relatives/friends

These applications can be helpful for users who want to send funds to their friends or relatives. It can be very useful for parents who are living in another city and user wants to transfer money to their parents or parents can give financial assistance to their child who is living abroad for studies.

Web/mobile peer-to-peer marketplace

This platform works as a middleman in buying and selling goods between individuals. The best solution for them is a P2P mobile app.

Companies providing services

Owners of restaurants, beauty salons, food delivery apps, and barbershops are now able to attract new customers by offering them alternate payment methods, and by these, they can increase staff loyalty by increasing their income a bit or giving discounts. In this case, waiters, courier men, and street magicians/musicians can accept their tips freely.

NGOs/Special organizations

The organizations who are providing charity initiatives, crowdfunding or any kind of the same service can find such P2P service helpful.

Importance of P2P Payment API

P2P payments are so effortless and flawless that it makes the payment of bills, in-store purchases, and split bill payments within seconds. Payment API for P2P transfers your money rapidly to whoever you want by connecting with your financial institution account by debit or credit card.

The P2P payment API should be, nevertheless, much more functional, practical, accessible and convenient to use. A P2P payment API should promise an easy and streamlined onboarding process for users that at the same time ensure maximum customer benefits for the payment method. Many P2P payment methods are simple to use with user-friendly methodologies.

How does Peer-to-peer Payment System Work?

It’s not too difficult to set up P2P payment accounts. You may quickly register an account and link your bank account to it once you’ve decided on your preferred platform.

In order to guarantee total security, several P2P apps demand comprehensive user authentication and passwords. Using the search bar after creating an account, you can seek up other users by their username, email, or phone number.

You must decide to whom you will transfer the money when it comes to paying. In addition, you must enter the transaction amount and a justification for the payment. The transmission time varies slightly depending on the P2P service platform you select. The transfer usually takes a few seconds or 2 or 3 working days.

Following are some of the P2P payment methods:

  • Credit cards
  • Direct bank transfers
  • Payment gateways i.e (PayPal, Stripe Connect, MangoPay)
  • Own-built payment system

If you are willing to make the payment convenient at your marketplace, it is advisable to combine different payment methods under one roof.

Examples of some peer-to-peer lending apps

TransferWise

This is a P2P transfer service that allows students studying abroad to transact money worldwide.

CashApp

It is a P2P repayment app that is owned by Square. It is a credit card processing solution for any organization.

Venmo

Venmo can be used for P2P repayment by downloading the Venmo phone app or Venmo site.

Dwolla

It is a real-time repayment app that allows users to participate in the financial scene.

Popmoney

It is owned by Fiserv and specially built for P2P payment integrations in financial firms.

Types of peer-to-peer payment apps

There are two types of P2P money transfers that mobile payment apps can make. That user whose bank cards have been issued in the same country can make internal transactions while the cross-border transactions take place between users of different countries whose fees are higher and transfer limit is lower.

The following are main types of peer-to-peer payment app

Banking solutions

Banks have entered into the P2P payment app market by offering their own solutions to clients. To work with such applications the retailers should have POS devices that are compatible to accept such payments.

ISPs- Independent Service Providers

The ISPs are those companies that establish cooperation by getting banks that accept card details and process the money transfer. Such banks are having all necessary licences and accesses and are willing to provide ready-made services by some regulations.

Social media platforms and messengers

Yes, you are right! World-famous social media platforms such as Facebook and WhatsApp Messengers have created innovative payment apps.

Mobile OS

Android and Apple Pay are such operating systems that allow users to resort to peer-to-peer transfers and make contactless payments.
Building own custom Peer-to-peer payment solution

The P2P application programming interface allows you to integrate existing systems with P2P events. If you are going to opt for your own custom payment API then it will be easy for you to integrate another Peer-to-peer payment system for an enhanced, improved, and smooth experience.

You will need a cash fund or mobile bank account if you are designing a P2P payment API. It will also require creating a mobile money API so that the API can interact with cash and send it to a real bank account. In mobile money, the transactions take between the money that is available in the mobile wallet and doesn’t access any bank accounts. It accesses the funds between P2P apps.

Advantages and Disadvantages of customized Peer-to-peer payment solution

If you are trying to build your own P2P payment API, it has many advantages and disadvantages but the only thing to make sure of is that you have a high calibre and user-friendly payment system app.

Following are some of the advantages of peer-to-peer payment app

Easily integrated with mobile apps

If you are already using a mobile app or a P2P website for your financial firm that integrating it into your tailored API should be easy.

Control on App

If you are willing to increase your client’s experience, your P2P application should be fully controllable that implies you to create and perform updates at your own pace.

Productivity increases

The software which is tailored as per your need maximizes the staff’s work faster and smarter.

Disadvantages of customized peer-to-peer payment app

Requires a mobile app development team

A smart development team is required while build the best custom application. It is quite tedious work to find a strong software development team that has essential knowledge of payment app development.

Investment of time and money

Creating a payment API from start requires an ample amount of time and lots of money

Rules and regulations

The entire development process needs purchasing of license, regulation, partnership, etc.

How to use peer-to-peer system money transfer APIs?

The same verification process is required as same as banking transactions. However, any company that is going to utilize P2P funds for transferring API should know the basic banking practices.

Some of the steps include:

  • Linking bank accounts
  • Know your customer (KYC) verification
  • Storage of personal information through PCI-SSD hardware
  • Security measures such as encryptions, authentications, OAuth/Open ID, and system protection such as throttling or quotas.

Conclusion

International and internal payments are changing totally due to peer-to-peer payment applications. In fact, many people are immigrating from old banking methods to peer-to-peer payment systems. You can get a smart P2P payment transfer API by professional payment app development companies that make you stay on top of these payment trends.