People choose mobile phones for money transfers more than they used to. Around 69% of smartphone users prefer sending money to individuals through an app rather than a website. Carrying cash is almost a bad manner among the millennials, which gives P2P payment apps like Google Pay, PayPal, or Venmo a great time to shine.
Such a demand makes mobile payment app development one of the most popular services in the global tech arena. By 2026, the mobile wallet market segment in North America will reach a staggering $80 billion. Financial startups spring every day, winning the hearts of consumers.
How to create a money transfer app? Discover the mobile payment app development process and the best practices below.
What is a P2P payment app?
Peer-to-peer payment apps (P2P) are mobile applications that allow users to transfer money from one app to another. They are also called mobile payment or money transfer applications. The reason to send money can be anything, from a car ride to an international payment.
Overall, with P2P payment solutions, payers can:
- Complete transactions in multiple currencies and languages across the globe
- Use online and mobile money remittance
- Track their money transfers and view transaction fees
- Request payments from their peers Share payments between multiple peers and more
How Does a Money Transfer App Work?
Although P2P applications differ in functionality, they all work similarly. To start using a P2P app, the user must create an account and verify their identity. After that, they can link their card(s) or bank account to send and receive payments. Apart from financial details, the app may also prompt the user to share personal information and add multi-factor authentication for additional security.
After the initial settings, it takes several clicks to complete a money transfer. The payer only needs to indicate the amount and the payment details of the recipient. Usually, an email, phone number, or name is enough. Depending on the chosen P2P app, the transfer will take several seconds to several days. Once the money is delivered, the recipient can withdraw it.
Types of P2P payment apps
Mobile payment solutions fall into several broad categories based on who offers them and why. These types include:
Banking apps. Many banks launch P2P payment applications for their customers to enhance customer service. It was found that frequent mobile banking users show the highest satisfaction with their primary bank – 71% compared to 44% of nonusers. P2P banking apps also allow financial organizations to expand into a new market niche.
Independent services. Independent mobile payment services are created by startups that want to enter the fintech industry. These are solutions like PayPal or Venmo. They provide people with e-wallets to add banking cards for peer-to-peer payments.
Mobile OS systems. These P2P systems are not truly mobile apps but work very similarly. Solutions like Android Pay and Apple Pay allow users to exchange payments and use the NFC technology to pay with their smartphones at stores.
Messenger platforms. Some social media platforms have also started investing in P2P payment app development. Now, users can make transfers directly from the messenger for extra convenience. For example, WhatsApp has already launched P2P payments in India and Brazil and currently plans to implement them in the US.
Top features to consider during money transfer app development
Before making the first steps to P2P payment app development, it's good to understand what functionality you need. It will be easier to convey your ideas to business partners and the tech team with the formulated concept.
Regardless of the type, most money transfer apps have overlapping features. These are must-haves to connect users and enable them to complete money transfers.
Here is the list of essential features to have in a money transfer app:
- Sign in. A sign-in page asks users to enter credentials and may include two-step authentication. For example, the person needs to provide their email and password and type the code sent to their mobile device afterward. Facial recognition is another popular technology adopted for user identification in financial apps.
- User profile. A profile is where the user shares their personal and contact details. Here they can also pick the language and complete other basic settings.
- Card and bank account linking. This feature allows users to add their card or bank account to the application for future payments. They can also check the card approval status and edit or delete accounts.
- E-wallet. Here users can manage their money and complete transactions with the app or mobile device.
- Payment requests. With payment requests, users ask someone to make a transfer. After they enter the required amount and payer's details, the corresponding person will receive the request.
- Reports. They enable people to see how much they spent and received during the selected period. In P2P apps, reports should have very granular segmentation.
- Currency exchange. Since people often use money transfer solutions for international payments, they need the currency exchange feature. Besides, they may want to keep money in another currency, so you must enable them to switch.
- Notifications. Push notifications inform users about transactions and other significant events in their accounts.
- Real-time support. Chats are the most convenient way to solve customers' issues. In addition to in-app chats, the P2P payment platform should also offer email and phone support.
You won't do without these features in money transfer app development. They are crucial for personal funds management and transfers between accounts. It's the foundation of any mobile payment app users expect to have.
How to build a P2P payment app: approaches, stages, and reasons
The software development lifecycle for mobile payment app development doesn't differ much from other solutions. You will still need to research requirements, create a prototype, do coding, testing, and deployment. As to the approaches, money transfer app development has some favorites. Let's see what best practices companies use, what stages they go through, and why.
Mobile Payment App Development Approaches
In the modern P2P payment app development field, the Agile approach dominates. Agile combines methods and practices that allow redistributing workload within a team for faster and more efficient development. Business analysts, designers, QA engineers, developers, and other team members work in sprints to deliver the software step by step. Agile adds transparency and allows companies to meet tight deadlines.
Why does it matter in mobile payment app development? The fintech market is growing and changing extremely fast. Hence, flexibility and speed are essential for success. Besides, Agile development helps optimize expenses and create complex solutions more easily.
Apart from Agile, many money transfer app development companies tap into DevOps practices. It means continuous software integration and delivery when engineers start from small tasks and gradually scale. It also means comprehensive automation, including code development, regress and load testing, database updates, and middleware configuration.
In terms of technologies, mobile payment app development absorbs all the latest innovations and trends. Low-code development, artificial intelligence, Blockchain, cloud, and big data analytics are some of the most prominent industry choices.
Stages of Mobile Payment App Development
Now, let's talk about the mobile payment app development process. It's a step-by-step procedure that starts from a raw idea and continues with the following stages:
Business analysis. Without requirements and market analysis, a startup is likely to go in the wrong direction. Therefore, you need to engage business analysts before initiating software development. They will analyze your business needs and match them with market silos to recommend a potentially successful solution. At this point, you will also estimate the budget and create a mobile app development roadmap.
Choice of the P2P app type and features. The business analysis should guide you on the best P2P payment app type in your case. You will understand the expectations of the target audience and what functionality can meet them. As a rule, consumers prefer mobile apps for transactional activities, whereas offline interactions remain popular for high-touch interactions.
Besides, consider safety issues and plan ways to protect users' data from attacks and leakage. You must build security into the P2P payment app from the very beginning.
Prototype creation. Now, it's time for your UX/UI designers to show their mastery. They will need to create a prototype of the future P2P payment app. The prototype materializes your ideas into an app draft that communicates the navigation flow, design, and layout. You will also use the prototype to run a presentation for investors and start a marketing campaign.
Money transfer app development. This stage is about coding. Your software engineers, designers, business analysts, and other team members cooperate in developing the app. It usually takes the most time out of other mobile payment app development steps.
Testing. QA engineers check the app functionality to detect bugs and areas for improvement. It allows you to polish the solution before the launch and make it more secure.
Launch and maintenance. This is the final moment when everything is ready for launch. Your team publishes the application on platforms like Google Play or App Store. It also keeps working on the app behind the scenes to fix any issues (which always pop up after the first launch) and implement updates.
Reasons to invest in P2P payment app development
Now, when you know how to build a P2P payment app, you may have another logical question: Why should I? The answer depends on who you are.
Large financial institutions invest in money transfer app development to launch digital transformation . For banks, it's a chance to go from offline services to more digital customer experiences. They also save human resources by replacing workers at branches with self-service P2P portals. Besides, some financial organizations create P2P payment apps as alternative products. In this case, mobile payment app development becomes a way to reach a new target audience and generate more revenue.
Startups and SMEs, on the other hand, view mobile payment app development as an attractive business niche. In 2021, 42% of US consumers made peer-to-peer payments via a direct money transfer service. By 2030, the global P2P payment market will reach $9,097.06 billion with a 17.3% CARG. It means that anyone who joins this market segment ends up in the rapidly growing field with crazy demand. It inspires startups to try their luck with new P2P payment solutions.
7 Outstanding examples of P2P payment app development
In the course of P2P payment app development, you will probably borrow a lot from popular solutions. And it's not bad. Everyone should learn from the best. Below are the most downloaded and renowned P2P money transfer apps worldwide.
PayPal is the most famous P2P payments app, with 56.6 million downloads . Being among the pioneers is one of the reasons behind PayPal's success. But there is more to it.
The PayPal app is a very convenient all-in-one solution. It allows users to securely keep their bank accounts, credit and loyalty cards in personal digital wallets. With PayPal, they can also buy, sell, and hold cryptocurrency. It automatically transfers paychecks and government payments up to 2 days early.
- You can send and request a money transfer by another user's name, email, or phone
- Apart from peer-to-peer payments, it allows you to buy/sell online
- Up to a $60,000 transfer limit, which is pretty high
- The PayPal Savings feature with 0.40% APY (6x the national average)
#2. Google Pay
Google Pay is a second popular digital wallet platform. It is supported both on iOS and Android devices. The app allows transferring money to individual users, groups of people, and businesses.
Users can do pretty anything with this app, from splitting bills for meals to business transactions. Since it makes the payment directly to a recipient's bank account, they don't even need to install Google Pay to receive money.
- Money transfers go directly to the sender and recipient's bank accounts
- Can be used at the checkout at retail stores
- Support on Android and iOS devices
- The Google Pay balance feature for receiving the money to the Google account
AliPay is a Chinese solution by the Alibaba Group. It enables users to send peer-to-peer mobile payments, exchange currency, and do many other routines, like order food or pick an insurance scheme. That's why AliPay is slightly more than a P2P payment app.
- Online and in-store payments
- Taobao and TMall order placement and tracking
- Additional features (e.g., taxi ride or food ordering)
- Air/Rail/Movie ticket booking
- Discounts and promotions from merchants
Venmo is a P2P payment app with social media adds-on. Users can send money with messages or emojis to make interactions with their peers more fun.
Venmo also allows buying cryptocurrency, creating a business profile, and paying in some of your favorite apps like Uber Eats, Grubhub, StockX, and Zola.
- Payments to friends or users in close nearby
- Instant premium payments or free payments that take 1-3 business days
- QR support for touch-free payments at stores
- You can buy crypto from as little as $1
Zelle is a result of top US banks and credit unions' P2P payment app development cooperation. Like other apps listed here, it offers a simple way to send funds to friends and family. Transfers are swift and go directly from a bank account to a bank account.
If you use the services of a bank or credit union that supports Zelle, your online banking app will already have it. If not, you can download the app to send money to enrolled Zelle users.
- Supported by leading US banks and credit unions
- No limits on receiving money
- Easy bill splitting for shared payments
- It takes minutes to send money to other Zelle users
#6. Cash App
Cash App by Square is a P2P solution that, apart from standard payments, also allows users to invest in Bitcoin and the stock market. Even $1 is enough to start buying stocks. This app has a passcode, FaceID, and TouchID authentication to securely store all confidential data.
- You can buy and sell Bitcoin 100% free state and federal tax filing
- Comes with a free debit card you can use for transactions
- Investments in the stock market
PhonePe is an Indian service with the usual P2P payment functionality and some specials. You can connect it with BHIM UPI, credit card, debit card, or wallet.
PhonePe enables users to recharge a mobile phone number, pay bills, buy insurance, make online and offline payments, save taxes, and more.
- Online payments to peers and businesses
- Opportunity to purchase or renew insurance policies
- BHIM UPI money transfers
- Allow paying credit card, landline, electricity, and other bills
- Refund management
Cost of mobile payment app development
As a rule, to estimate the cost of mobile payment app development, you should know what features the solution will have. The price starts at $20,000 and may even exceed $140,000. Money transfer app development is a lengthy process that requires many skills and expertise. Therefore, it's usually expensive.
Consider hiring a remote team to cut costs and find skilled software engineers faster. Developers outside the US and Europe charge less while having the same level of expertise. It will also save you from the high recruiting expenses caused by the shortage in the local labor market.
P2P payment app development is a niche that attracts many large market players and startups. Its steady growth and the increasing number of mobile payment users promise a bright future to those who succeed. The businesses that manage to attract users with their P2P apps enjoy high revenue and fame.
At the same time, it's not that easy to become the next PayPal. You will need to create the app concept very carefully and invest a lot in money transfer app development. Assembling a skilled tech team is another challenge.
Binariks can help you with the latter. We have years of experience as a technology partner for fintech startups, SMEs, and enterprises across the globe. Binariks can offer you a dedicated team or allocate the necessary specialists to join your project at any stage.