A Quick Guide to How to Build a P2P Payment App

Sudeep Srivastava August 21, 2023
How to Develop a P2P Payment App

Mobile apps and digital transformation have brought a major disruption in our everyday lives. They have made various activities simpler, faster, and secure – including making payments.

Today, the result of FinTech transformation has led to endless Peer-to-Peer (P2P) payment applications in the marketplace that enable users to transfer money to others via credit/debit card or other contactless ways. These applications, not just aid in preventing visiting ATMs and banks but are also emerging as the perfect companion in the field of splitting rents, sharing dinner bills, and splitting vacation bills.

This is probably why the global P2P transactions are expected to surpass USD 1927.23 million by 2030. P2P payment apps are offering services to consumers with greater accessibility, conviction, and faster transfers. 

This sudden rise in the usage of P2P apps over traditional ways and the revealing statistics have encouraged enterprise and business leaders to look forward to investing in Venmo-like P2P payment app development. A detailed study of which we will be doing in this article.

But firstly, let’s quickly refresh our basics.

What is Peer-to-Peer payments?

Peer to Peer Payments or P2P Payments is electronic transfer made by one individual to another with the help of a mechanism that is called P2P Payment Application. Every individual account gets linked to the other user’s digital wallet through these applications. As soon as the transaction occurs, the account balance in the application records it and pulls money directly from one user’s bank account or app wallet and sends it to others.

When talking about it in detail, every P2P payment app falls among one of the three prime categories, with each having its own benefits and set of market leaders.

Types of Applications to Look at Before Investing in Peer to Peer App Development

Peer to Peer App Development

1. Standalone Services (PayPal and Venmo)

These types of online mobile payments apps do not rely on banks, and they have their mechanism of storing and dealing with money without any link to any financial institution. They all have the Wallet feature, making it possible for users to keep money before offloading it in some bank account or sending it over to their peers. 

PayPal’s user base, since its inception, has grown to more than 202 countries where around millions of users make thousand transactions per year, on average via 100 different currencies. 

Something that is enough to direct entrepreneurs and developers towards PayPal or Venmo, like P2P payment app development.

2. Bank Centric (Dwolla, Zelle, and Popmoney)

Another app category to consider for taking advantage of P2P payment application development is Bank centric apps.

These mobile apps involve banks as one of the parties when doing transactions. While most banking institutions have their own apps, -Peer-to-Peer payment apps facilitate the fund transfer through its partner bank and credit unions. 

These apps draw from and deposit directly into bank accounts instead of a stored currency account.

3. Social Media Centric (Facebook Messenger, SnapCash, Google Pay)

Social media-centric apps are yet another type to consider when developing mobile payment apps.

These types of mobile applications, launched by social media giants, enable users to transfer money using their credit/debit cards without exiting the platform. A few types are SnapCash, Softcard, and Google Pay.

Now while this has given you a clear understanding of what exactly a P2P mobile app is and what are the different types of mobile -Peer-to-Peer payment apps, let’s move to the next step, i.e., the features to see when it comes to developing mobile payment apps.

Common Underlying Features in Every Successful P2P Payment Apps 

There are some features that we, as a leading financial app development company, incorporate in the P2P payment app development process every single time. These are the ones that you should have in the apps that you are all set to offer to the flourishing Fintech world.

Features in successful P2P Payment Apps

Unique ID/ OTP

Every Fintech app has an OTP or unique id that is sent to and verified by the sender before the money is deducted from their account or wallet. To make apps even more secure, some P2P Payment Service Providers even ask for the OTP every time one opens the app.

Technical Frameworks used – Third-party SDKs like Twilio, Firebase, Nexmo, Digimiles.


This -Peer-to-Peer payment app feature allows people to inform when the payment has been initiated and when it has been received. Using this, users are notified of any of their account or wallet activity. For apps that have extended their services from -Peer-to-Peer transactions to individual transactions like bill payment, ticket booking, etc., this can notify the users of upcoming bill due dates.

Technical Frameworks used – Rest APIs, Chrome notifications, Amazon SNS, Firebase cloud messaging, and APNS.

Send Bill, Invoice

There should be a feature to scan and send the bill to the person who needs to make the payment. Along with that, both the parties, the sender and receiver, should receive a generated invoice for the transaction, which should be saved in the app itself.

Technical Frameworks used – Rest APIs, Bamboo invoice.

Transaction History

Transaction history is again one of the important features to consider when building a P2P payment app. This feature would give the users a summary of all their past money transactions made through the app.

Technical Frameworks used – Rest APIs.


To build a payment wallet app like Venmo, considering chatbot as a prime feature is also profitable.

This feature helps deal with various points of disputes that can come up when transacting funds through an app, from a lost internet connection in the middle of the transaction to the wrong deduction of the amount from the wallet or account. 

Technical Frameworks used – Third Party party SDKs – Zendesk, Microsoft Bot Framework, LUIS, Wit.ai, Api.ai, Chatfuel, Facebook Messenger Chatbot, and Amazon Lex

Transfer Amount to Bank

Generally, users look for a way to transfer the amount that they receive through the apps to their bank accounts. While every app has its own set of business models, this is one of the most preferred features of P2P Payment applications.

Technical Frameworks used – ACH, Dwolla.

This is about the features that should be added to the apps. But along with the must-haves, some scenarios should be avoided as well. While most of them are not in your hands, there are some technical issues associated with -Peer-to-Peer app development that you can easily overcome by being cautious. 

It is also essential to know how these P2P payment applications work before we learn how to build one.

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How do P2P payment apps work? 

P2P payment applications require users to sign up for an account and link their cards or bank accounts to the service app account. Additionally, these apps also ask for personal details and memorable words and passwords for maximum security. When the user is all set up with the app, he can find other users through email, phone numbers, and QR codes. 

To send and receive payments, users need a few clicks to choose the recipient name, the amount of money, the purpose of payment and transfer the amount. The time of fund delivery may vary from a few seconds to several minutes, depending on the bank server and the type of service one avails. 

So, let’s move to the next step related to the P2P payment app development process. 

How to build a P2P payment app like Venmo? 

To initiate the process of digital wallet app development like Venmo, formulating a comprehensive concept for your project and delineating precise requirements is imperative. Below, I outline a series of universal steps for the successful execution of P2P payment applications, tailored to your business needs

How to build a P2P payment app

1. Choose the P2P app type

Initially, you need to select the type of your P2P application from the preferred services available such as banking and standalone solutions. Apart from these, you also can design apps that support real-time payments. 

2. Prioritize mobile platform 

If your app budget is limited, you can choose either Android app development or iOS app development. Prioritizing your mobile app development platform benefits you in two ways: 

First, you understand which platform your users prefer and then analyze what features work for them and what functionalities need modifications. Second, you will later have space to develop one more app version for multiple platforms. 

3. Define features for your P2P app 

As mentioned above, the set of features your P2P carries defines the application’s success. Start with the basic ones and keep adding the key elements of the USP. Just in case you don’t miss out on anything, research your target audience, design a user portrait and study the user flow. Also, put details into the path that your users will go through while interacting with the app. 

Choose the right technology stack. 

Right technology selection plays a vital role in making your P2P payment app more functional and interesting to your users. Today, FinTech has developed innovative functions such as NFTs (Non-Fungible Tokens), biometrics, and face ID payments; however, do not limit your technology stack to these features. 

Do not hesitate to use convenient software and tools that give your P2P app a higher chance to succeed. Moreover, ensure that you follow trending blockchain-based solutions and integrate supportive crypto technology with your app to stay ahead in the mobile payments market. 

4. User-friendly UX design 

The user interface and UX design of your P2P payment app must be intuitive and straightforward. You don’t want your active users to waste time figuring out how everything works; therefore, try keeping mindful features that are easy to read. 

5. Security

Integrating security protocols in your P2P payment app development process is a must. Simultaneously, your P2P app should be incorporated with cyber security and data safety features such as Fingerprint, face recognition, scanners, etc. Ensure to put two-way authentication for maximum compliance.

6. Testing 

Testing and quality assurance is yet another crucial phase in the P2P payment app development process. Your team of quality assurance professionals must perform every possible testing to fix bugs at the initial stage. You might even need experts to follow the beta testing of your app and its payment gateways. 

7. FinTech legal compliance

PCI-DSS (Payment Card Industry- Data Security Standard) is a must-follow protocol when you are developing a mobile payment application. Do not forget to acquire a PCI-DSS certificate to create transparency and trust in the market. 

Now, before we move to the technological challenges in building a P2P payment app, If you wish to know the cost of developing your P2P application, check out: how much does it cost to develop a P2P payment like Venmo.

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Different Challenges in Developing P2P Payment App

Even though the world is now moving towards the digital money era, the industry has some challenges that persist and should be overcome for a P2P Payment App to survive in the mobile payments market. Let us look at both technical and non-technical challenges that are still staring at the P2P Payment industry –

Starting with Non – Technical;

Regional Limitations

The major players of the P2P industry are restricted in their geographical limitations. It is still not common for a P2P payment app development services provider to enable fund transfer between two nations. As the Fintech industry continues getting overcrowded, a brand needs to expand its geographical reach in order to come out as an industry leader.

Lack of Open Loop Solutions

Presently, when making payments through P2P Apps, both the parties – one making the payment the other receiving it, should be on the same platform. While it is easier to transfer funds between people we know, there are times when we take or conduct one-time payments with people we don’t know. 

The open-loop platform enables the users to conveniently accept and transfer funds from/to anyone – eliminating the need for the involved parties to be connected through one platform or give-and-take personal information.

The cases of dispute

There are several disputed points that are associated with P2P Payment Apps. Suppose you initiate payment to someone, and instead of going to them, it goes to someone else, or what would you do when an amount is debited from your wallet or account, but the person it was supposed to reach hasn’t received it. Like these, there are many things that can go wrong within the minutes of money leaving your wallet and reaching somebody else’s account. It would be best if you kept a note of these issues before getting involved in the process of creating a custom P2P payment app.

Slow changing Mindset

While people are adapting online payment methods and the increasing number of P2P apps, the industry is still growing at a slightly slower speed. People are still more comfortable using cash and cards instead of mobile apps. The reason behind this is not the UI or accidental lagging; the reason is being unsure of the safety measures these apps follow to save confidential information.

While these were the non-technical issues hovering around the industry, let us now look at the technical challenges that can hinder the P2P payment app user journey –

Now, the Technical ones;


One of the biggest technologies-related challenges that P2P app development companies face is security. Going by the track record, hackers have been able to get into some of the most secured institutions and platforms like NIC Asia Bank and PayPal. 

The high level of vulnerability has made Security one of the biggest challenges in the Mobile P2P Payment industry. With the huge amount of confidential data being stored in one place, the P2P Payment service providers must create a secured data record management system.

Comply with PCI DSS

It is imperative for every brand dealing with confidential banking information to follow the PCI DSS Compliances. To be eligible for the certificate, the P2P Payment service providers should meet these criteria –

  • Develop and maintain secure system and network
  • Have a vulnerability management system in place
  • Create strong access control standards
  • Safeguard confidential information
  • Continuously test and monitor networks
  • Maintain and update all information security policy

Currency Conversion

Another challenge that the P2P Payment Service providers face is calculating and converting currencies in real-time. With 180 currencies worldwide, it can get tricky for the service providers to create a mechanism that keeps everything on track.

Along with this, the money conversion and fund transfer need to be done in the shortest time possible: an event that is easier when banking institutions are involved but a little complex when it comes to a digitized market.

What’s the next level?

There are continuous symptoms of growth for blockchain and cryptocurrency use inside the mobile payments industry. The working behind bitcoin has even become one of the most talked-about topics in the current times. Companies have already realized the scope of using bitcoin within in-game micro-purchases. Bitcoin has even become an alternate mobile payment coinage in some developing economies such as Brazil.

[Read: List of Top 7 Most Frequently Used Mobile Payment Apps]

What Blockchain and Cryptocurrency is all about 

Blockchain technology

The Blockchain is an unsigned online ledger that uses data structure to ease our transaction processes. It allows its users to edit the ledger securely without involving a third party.

While the bank’s ledger is linked with a centralized network, Blockchain is completely anonymous, thus protecting its users’ identities. This anonymity makes the technology a secure way to do transactions, and Blockchain is consistently implemented on distributed networks. The algorithm it uses lowers people’s dependency on authenticating the transactions, giving Blockchain the potential to unsettle the prevalent financial systems.

The electronic record of transactions is incessantly maintained and then verified in the ‘blocks’ of records. Finally, the meddle-proof ledger is then shared between the parties on their computer servers by taking the help of cryptography.

Blockchain in mobile apps is expected to lower the inefficiencies and costs involved in dealing with the businesses in the financial sector.


Cryptocurrency is a digital currency that exists and operates in digital -Peer-to-Peer networks. It is not a string of data like your regular MP3 and Video files that can be copied. Cryptocurrency is actually an entry on a global ledger known as Blockchain.

[Know more about cryptocurrency with our article – How Does Cryptocurrency Price Moves in the Market?]

How does it work?

When you are sending someone cryptocurrencies, you are not sending them a series of files. Instead, you are writing down the exchange in the ledger, a.k.a. Blockchain. Now even though Blockchain is a decentralized record, there’s no group of people who update the ledger, like what happens in banks. The mechanism is entirely decentralized.

Some people volunteer to keep track of transactions and continuously maintain them in ‘Blocks.’ Now, when you want to transact currency, you will have to announce it to the table so that people who maintain the ledgers can update them.

Fintech, along with its continuous advancements, is all set to make Peer Peer Payment much more robust and easier to adopt, pushing companies to get involved in the P2P payment app development process.

Are you ready for the move?

How can Appinventiv help you with P2P payment application development?

Appinventiv knows how people pay, buy and invest. We bring you extensive and world-class Fintech software development services ranging from investment solutions to dynamic KYC platforms to fraud prevention and wealth management software. We also have a rigorous security approach while providing an end-to-end digital payment solution to your business. Talk to us to explore infinite custom FinTech app solutions. 

Sudeep Srivastava
Co-Founder and Director
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