Everything about P2P Payment App – Stimulating a Cashless Future
Different industries are influenced a lot by the digital revolution when it comes to functionality and productivity. The finance industry is not an exception from this anymore. In the future, individuals will not be using banking entities any longer for different money transactions. Instead, people will leverage online peer-to-peer (P2P) payment applications.
Mobile app development companies are already deploying comprehensive P2P payment solutions to plenty of large-scale organizations. But you might not know what is P2P when it comes to payment. This article will surely help to solve the buzz.
What Is Peer To Peer (Person-To-Person) Payment App and what they do?
It may look complicated at a glance, but it is a simple term to understand. P2P app performs the role of mediator that aids an individual to transfer money from one bank account to another. No need for physical cash to send. Money is transferred directly in a bank account without compromising on security issues.
These are the apps connected to individuals’ bank accounts, credit/debit cards. The money transfer may take two to three days to a few minutes according to the type you choose like IMPS or NEFT or according to bank specifications.
Why are P2P Apps acknowledged widely nowadays?
• P2P payment transactions can be performed through any device (Desktop, Laptop, Smartphones, Tablets) that has a strong internet connection.
• A customized P2P app solution can address all business needs regarding finance.
• It is cost and time effective as there is no need for a middle man to perform transactions.
• Provide high security with encryption techniques to protect financial data.
• Users can anonymously make payments.
Four Business Models of P2P Payment Apps
Standalone vendors (Venmo, PayPal, Square Cash, Alipay, M-Pesa, Airfox)
These are the apps that do not need to rely on banking entities to decide on rules and condition specifications. They can develop their own system with the Wallet feature to store and deal with users’ funds. Users can keep their money in the wallet before outsourcing in bank accounts.
Paypal and Venmo are the best examples of Standalone apps that are widely accepted by users.
A Number of PayPal’s total active user accounts from 2010 to the 4th quarter of 2020. (in millions)
A Number of Venmo’s total payment volume from 2017 to 4th quarter 2020 (in billion U.S. dollars)
Bank-centric services (Dwolla, Zelle, clearXchange, Popmoney)
These are the apps that entail banking entities as one of the third parties while performing transactions. With these applications, users can pay through credit/debit cards. The bank-based app streamlines the tasks for the seller as well as the purchaser and is mostly leveraged by the eCommerce platforms. Merchants have needed PoS acceptance capability to receive payments.
Social Media platforms (Snapchat, Facebook Messenger, Kik, WeChat, G Pay Send, WhatsApp, Square Cash)
These are the apps deployed by the social media giants that allow users to perform transactions using a debit/credit card without leaving their chatting and image sharing apps. It does not need any solid authentication to complete the transaction. As WhatsApp is enabling their users for immediate bank-to-bank transfer services in India.
Mobile OS centric Services (Apple Pay, Samsung Pay, Android Pay)
These are the apps enabling users to perform transactions only to other users of Android, Samsung, or Apple pay. Users can also pay at stores where Point of Sale(PoS) is endowed with NFC technology. These models are suitable to the countries where payment infrastructure pre-existed and users are completely affluent with its usage.
P2P Money Transfer Apps
Here is a list of the best Money Transfer apps according to the techradar posted 3 months ago.
• TransferWise (TransferWise is now Wise.)
Rules and Regulation Compliance
The payment industry has experienced drastic changes over a decade. As per the GPSS (Global Payment Systems Survey) performed by the world bank, the use of retail payments devices varies among all the countries due to legal, cultural, economical, and historical factors.
Central banks around the world have been drafting policies to develop a cashless financial future by assuring security and scalable payment systems. Many causes have been forcing banking entities to review their rules, regulations, and policies along with payment systems. Some of the causes are users’ expectations, digital transformation, the origin of FinTech and non-banking operators, and fraudulent activities.
Regulatory organizations and central banks are following specific principles to address areas like customer fund protection, security, new entrants, advanced technology, customer education, and cost-effectiveness to create policies and rules to regulate and manage key stakeholders within the digital payments ecosystem. Many regions are already outlining centralized compliance and asking P2P app providers to follow it thoroughly.
PCI DSS compliance
|Level||Applies to||Validation requirements|
PCI Level 1
|Merchants processing over 6 million online card transactions per year||– SAQ-D questionnaire|
|– Periodic audits made by security assessors|
|PCI Level 2||Merchants processing between 1 and 6 million online card transactions per year||SAQ, signed by a QSA or a trained PCI SSC ISA employee|
|PCI Level 3||Merchants processing between 20,000 and 1 million eCommerce transactions per year||SAQ mandatory|
|PCI Level 4||Merchants processing less than 20,000 online card transactions yearly||SAQ recommended, not mandatory|
According to Deloitte 2020 Asia Pacific Financial Services Regulatory Outlook,
“Policymakers and regulators will continue to be challenged by the need to respond to the pace and scale of technological change. The financial services regulatory debate will be characterized by issues such as whether to expand the regulatory perimeter, risks associated with increasing use of artificial intelligence, the impact of innovation on operational resilience and cybersecurity, and digital ethics. These are global issues, but a lack of political will and adequate international bodies in some policy domains will likely hinder efforts to align regulatory approaches.”
• Transfer money into the app’s system from a user’s card or bank, Paypal, or bitcoin account.
• Transfer money among different users and third-party systems from your system instantly and without any cost.
• Withdraw funds from the system to their bank, Paypal, or bitcoin account or prepaid debit card.
Salient Features of P2P money transfer app
1. Notifications to inform users about money received or initiated as well as notifies about all the wallet activities.
2. Fingerprint security lock to ensure that only users have access to their accounts.
3. Transaction history shows past transactions performed by the users.
4. Unique ID/OTP needed to verify a transaction before deducting any amount from the account.
5. Bank transfer that enables money transfer to any bank account through the app.
6. Buy and sell cryptocurrency feature that allows users to buy/sell Bitcoin or any other digital currencies very efficiently.
7. Send a bill/invoice that enables users to scan and send a bill to a respective person. Apps should also generate transactions’ Invoices received by sender and receiver.
8. Chatbot deals with all the difficulties that occur while transacting funds, faulty deductions from the account/wallet, no internet connection, and much more.
9. Virtual Card that allows users to pay by just scanning a card through the app while shopping.
Development and Designing Challenges
1. Security challenges that make apps highly secure from the fraudulent activities generated by the hackers.
2. Conversion of currency that enables users to convert more than 180 currencies within the shortest time frame.
3. Go beyond the Regional/ Geographic Constraints to enable users to transfer money across borders.
4. People are hesitating to change mindsets as no one wants to take a chance when it comes to the security of their money.
5. PCI DSS Compliances that include vulnerability management system, update every security policies, create secure network and system, constant testing and controlling of networks, build strong access control standards.
6. Apps should have the ability to settle disputes like a person is not able to receive money even if it is deducted from the sender’s bank account.
7. Another challenge is integration with advanced technology like Blockchain as it has a disruptive character.
8. Designs need to be user-friendly that offer an intuitive interface to the users who are not from a technical background.
9. Keeping pace with the changing rules and regulations is a key challenge with the P2P money transfer apps.
The future of P2P payment apps appears pretty promising with advanced technologies such as blockchain and cryptocurrencies like Bitcoin. With P2P configuration, there are integrated computer systems that share information directly, without any centralized server.
P2P networks are likely to be more rapid and highly reliable. They are also simple and cost-effective when it comes to establishment and maintenance. With the help of Blockchain technology, developers can leverage P2P networks securely and reliably. Additionally, this top-level security aids in promoting greater confidence among app users.
There are digital marketplaces enabling users to buy/sell items, purchasing home goods, groceries, and other items by accepting payments handled with blockchain technology. The sky is the only limit when it comes to harnessing blockchain technology for payment transactions and possibly new and creative uses.
P2P money transfer apps are redefining the way people are performing financial transactions and buying items. So, we can definitely say that the future is very demanding when it comes to P2P payment application development.
If you are planning to build a leading-edge money transfer app, it is recommended to opt for a top-notch mobile app development company.
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