How to develop a robust peer-to-peer payment app

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develop peer-to-peer payment app
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    How often do you send money to your peers? Imagine you are out at a bar with your friends, and when the bill comes, someone says: ‘I can pay for it, and you guys just Venmo me’, or one of your coworkers is having a birthday and all the office chips in on a birthday present using Zelle. 

    Sounds familiar, right? In confidence, even landlords sometimes get rent through online payment services. Nowadays technologies are so deeply integrated in our everyday life, so they nearly rendered old school things like cash obsolete. According to statistics, more than 70 million people in the U.S. prefer to stay cashless and use peer-to-peer (P2P) payment apps to transfer money, and by the end of 2020 mobile transaction volume is expected to hit $396.48 billion. This app sector is booming and blooming, and if you want to develop peer-to-peer payment app, this article is for you.

    We have gathered our previous experience and created the ultimate guide on how to make a cash app like a rockstar. Here we reveal secrets about competitors, their  monetization strategy, as well as key features, costs and timeframes for your P2P app. You’re welcome! 

    Brief market overview: main competitors and how they make money

    In order to better understand P2P apps, you should find your niche and research the competitors. The market is broad and dynamic, so to start we recommend defining your niche first. Are you going to work internationally or in a certain region? Will your app be used for personal online payments only or will it be used for business purposes as well? Just brainstorm it with your team and come up with your advantages before you develop peer-to-peer payment app. The next step is to face your enemies competitors and research their business model. There are a lot of companies out there that offer mobile transaction services, such as PayPal, Zelle, Venmo, CashApp, Azimp, or SquareCash. For the basics, check out our list of major P2P apps and their monetization strategies.


    develop peer-to-peer payment app

    PayPal was founded in 1998 and is one of the oldest companies on the market. The mobile platform allows receiving and sending money to friends and family across the world using both the app and the website. To set up a personal account a user only needs to provide your legal name, phone number, billing address, and add a card info. In some cases, PayPal asks for ID authentication if you have reached a specific limit of transactions. The major source of income for the service is waiving transaction fees that depend on the type of your account (personal or business), to who you transfer money (a friend or a store), and to what country (within the U.S. or internationally). Also, for business accounts, PayPal offers a subscription for $30 a month to unlock extra features for the page and charges interest rate from deposits.


    develop peer-to-peer payment app

    Venmo was launched as a startup by two roommates – Andrew Kortina and Iqram Magdon-Ismail, and turned into a huge company currently owned by PayPal. The app has been called one of the four most popular peer-to-peer payment platforms and stats say Venmo is used by 14% of American adults to transfer money with $60 average transaction amount. They offer both Android and iOS apps, and to register, a user should have an American phone number, so it’s mostly available within the U.S. The app has added fun to money exchanges. Users can use emojis, add comments, and see the transactions their Facebook friends have done (if they set them as visible for friends). It is not just an entertaining and engaging feature, but also brings customers back to the app and increases CRR (customer retention rate).

    With regard to monetization strategy, Venmo is free to use on both ends. It only charges a 3% fee when a transaction is made with a credit card and an additional fee for withdrawing cash. Recently the company has introduced a second revenue maker – Venmo debit cards in collaboration with Mastercard.


    develop peer-to-peer payment app

    The last but not least competitor you need to know before you develop your own peer-to-peer payment app is the Zelle App owned by a group of major American banks. What makes this solution stand out from other services is that it operates person-to-person transactions (no business profiles) within U.S. bank accounts only. Zelle charges no fee for customers, and its initial goal is not to make a profit, but rather prevent bank clients from using a third party when transferring money. Experts say with the wider adoption of the app, banks will start charging fees, but not in the near feature. The architecture of the service is very simple: users provide the phone number or email address of the recipient and money goes directly to their account. No fees, no holds, no headache.

    5 key features for your peer-to-peer payment app

    ‘What to include?’ is also a big part of the question ‘How to make P2P payment app?’.  Apart from obvious transaction functionality and a payment gateway to secure the data, you also need a couple of other elements to make the execution perfect. We created a list of 5 crucial functions that peer-to-peer payment apps need to be robust and solid. 

    Registration form

    develop peer-to-peer payment app

    This is the first thing a customer deals with when downloading an app. Our general advice is not to make it too long and thorough – just ask about basic information, like name, phone number, and email, while a bank account can be added later before the first transaction is made.

    Security lock

    develop peer-to-peer payment app

    When it comes to finances, users need to know that their personal information and transaction data are secured. First of all, the app needs a security functionality to sign on. Usually, services use 4 or 6 digit PINs or TouchID/FaceID technologies. Secondly, when money is transferred some services ask for an extra code to confirm the transaction. Finally, we recommend implementing two-factor authentication when registered users log in, using a code sent to a phone number, an email, or automatically generated from an app.

    Contact access 

    develop peer-to-peer payment app

    This feature significantly facilitates the process – customers just look for a recipient in contacts and send money using a phone number only. That’s it, no extra information, no pain.


    develop peer-to-peer payment app

    Notifications keep users updated about their current balance after transactions and done payments. Let a user decide how he or she wants to receive the information, it could be a push, in-app notifications, texts, or an email.

    Customer support

    In order to develop peer-to-peer payment app that is user-friendly and easy-to-use, chat with customer support is crucial. Your app will be dealing with users’ finances and they will probably have many questions about how it works. No one wants to send an email and wait for a reply for hours. That’s why customer support should be in the app, quickly reachable, and trained to respond to all frequently asked questions.

    How to choose a developer

    When it comes to execution, the question about contractors pops up right away. How to find a trustworthy developer, to whom the idea could be entrusted?

    Let’s be honest, there are 3 basic ways to perform a background check: 

    • Google the company name and scroll the first two pages;
    • Read the reviews – here Google Maps can be useful if a company has an office. Some companies (like us) also highlight their previous works on their website – just look for a section ‘Projects’.
    • Check out design platforms like the Dribble or Behance to see their portfolio. 

    Also, trust your gut – if something concerns you about the developer’s background, it’s better to keep searching, until it clicks. 

    How much does it cost to develop an app like SquareCash or Venmo?

    The most intriguing part of this article is costs and timeframes. At Purrweb, we know that time of development is crucial for trending and dynamic markets like P2P transaction services. You definitely will not have time to redo the project, that’s why we recommend working with professionals from the start and checking the portfolio of our contractor you are going to work with beforehand. With such a difficult topic like finances, the general rule is everything in the app should be clear and straightforward – the simpler an interface is, the more people entrust in you and the more often they come back to the app to send and receive money.

    Good news is that we have a blog where we openly share our experience and a portfolio with previous works, where you can check our style. The framework uses a shared code base for both Android and iOS systems and allows us to execute both apps with one code. It simplifies the development process, and there is no longer a need to hire and control two different teams. But don’t be worried about the interface performance – React Native has a huge library of native UI-elements that make interfaces scroll, swipe, and act like native ones.

    Before we start execution, we always discuss deadlines and prices with clients. Two cases are never the same, each project needs different resources and has different timeframes. Well, how much does it cost to create P2P payment app?

    Key in your e-mail address to get a full breakdown of the estimation with all details

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    We will answer all your questions on how to develop a peer-to-peer payment app and share with you tips and secrets about robust and successful execution. Just drop us a line!