How to create a peer-to-peer payment app: The basics

6 min readOct 19, 2022

There was a time when paying by card was a wow. Now people don’t even need bank cards to pay for transactions. To accelerate and optimize all sorts of mobile payments peer-to-peer payments apps (P2P) are used. According to eMarketer, just 4 years ago in 2018, there were already more than 80 million P2P users. That is more than a third of the mobile population in the USA.

What are peer-to-peer payment apps and how to build one? Let’s answer basic questions about P2P apps. After reading this article you will know:

  • What are P2P payment apps?
  • Why do you need to build a custom P2P Payment app
  • Types of P2P Payment apps
  • Basic features for an MVP
  • Steps to create a P2P payment app
  • Legal compliance and challenges.

Before moving on check our article on how to build a mobile wallet app. That might be helpful. Now let’s get started!

What are P2P payment apps?

Peer-to-peer payments, or P2P payments, are a method to send and receive money from mobile devices with linked bank accounts or cards. Examples are Venmo, PayPal, and Cash App.

How they can be used? A simple example may demonstrate that. Say you need to split a bill. Your friend can pay the bill in full and you just transfer your share to his account using a P2P payment app. It’s easy and painless. All you need is a phone number or an email.

Why do you need to build a custom P2P payment app?

Simple statistics show that it is a lucrative business. According to LendingTree, more than 8 in 10 (84%) consumers say they’ve used a P2P service. According to Allied Market Research, the global P2P market is valued at about $1,889.16 billion and is projected to reach $9,097.06 billion by 2030. Most probably there is space to play in this market.

Types of P2P payment apps

If you want to create a peer-to-peer payment app, you need to know the types or business models. Basically, there are four of them.

  • Standalone vendors (Venmo, PayPal, Airfox)

These apps belong to entities that do not rely on banks for rules and conditions. They can develop their own systems. Users can keep their money in their wallets before outsourcing to bank accounts. This model is especially useful in some developing countries where people have limited access to banking.

  • Bank-centric services (Dwolla, Zelle, clearXchange, Popmoney)

These P2P apps work with banks to perform transactions, Users can pay through credit/debit cards. For example, Zelle is a bank-centric P2P payment solution. Users can send and receive money using their mobile devices. The platform allows banks to offer P2P solutions and take their share from non-financial entities. Users can access Zelle through banks’ websites, mobile applications, and the Zelle application linked to their debit card.

  • Social/messaging/web platforms

Social/messaging/web platforms like Facebook Messenger, Snapchat, Kik, WeChat, and Square Cash link user profiles with payment accounts. Instagram was one of the first social media platforms to incorporate shopping into its mobile app. Generally, social media platforms figured that people are more likely to send payments to their regular contact. So, they just met the market demand.

  • Mobile OS/device manufacturers

Mobile OS/device manufacturers like Apple Pay, Samsung Pay, and Android Pay allow for money transfers inside their product ecosystem. This model works best for countries with developed payment infrastructure. It also applied card tokenization, as well as device-based thumbprint authentication.

Basic features for an MVP

As you know MVP is the most important part of app development. It allows developers and business owners to understand how demanded their app is. As such, it can include only the basic features. So, this list might come in handy.

  • Sign up and authentication form
  • Profile page
  • Bank account integration
  • Digital wallet
  • Real-time payments
  • Transaction history
  • Invoice generator
  • OTP (One-time password)
  • Currency conversion
  • Customer support
  • Push notifications
  • Cryptocurrency payments.

Steps to create a P2P payment app

Below are a few steps that you need to focus on when creating a P2P payment app.

1. Choose the right app type

To decide the right app type, you must know the market demand. This takes a lot of analysis and research in what is called the discovery phase. There are several factors to consider when deciding on your app types like the location of your business, compliance requirements, and the business intent. For example, some businesses are intrigued by P2P lending’s growth potential in the coming years but they are not very keen on apps like PayPal or Alipay.

2. Define features for your P2P app

Once again this takes a lot of research. You don’t want to be a mere copy of your competitors. Anything that will add value to your users will define the success of your app.

3. Choose the right technology

Today, FinTech has developed several solutions like NFTs (Non-Fungible Tokens), biometrics, and face ID payments. There are also trending blockchain-based solutions. Whether you want it or not, crypto technology will help your app to stay ahead in the mobile payments market.

4. Build the MVP

MVP or Minimum Viable Product is the right path to take when it comes to any app development. You don’t want to spend tons of money on something that is not tested in the market. Therefore, build the product prototype and test it in the market. After you collect enough feedback and rebuild your app accordingly, you are ready to create the final product.

5. Consider security issues

Since you are dealing with a payment app, it is essential that your app is 100% secure. Therefore, fingerprint scanners, face recognition, content distribution, and other capabilities should be considered. An important thing is a two-factor authentication like SMS with a verification code. Your app should also get a PCI-DSS certificate. To know more, check PCI official website.

Legal compliance and challenges

Your app should meet the regulation standards for your target country. Here is a list of authorities in different countries.

As you can see, there are different authorities with specific regulations in different countries and it is very difficult to come up with a universal app that will meet all the standards. Therefore, most apps focus on one region or country following its laws and recommendations.

The industry faces some major challenges as well. Here are some points for consideration.


Security should be the number one concern. Basically, most apps are safeguarded by security tools like encryption. The main risk with P2P apps is that you can change nothing if you send money to a scammer or to the wrong person.

Currency conversion

It’s almost impossible to get track of all the world currencies. There are almost 160 different currencies in the world and it’s very difficult to keep up with real-time conversions.


It is a requirement that you comply with PCI DSS or Payment Card Industry Data Security Standard. Why is it challenging? PCI DSS standard has some 250 requirements and all of them have to be met to achieve compliance. Taking their technical nature into account, it becomes quite an extensive task. For more challenges on PCI DSS read Top 5 Challenges of PCI DSS Compliance.

Geographical restrictions

As stated earlier each area has its own restrictions and it is impossible for one app to consider all. Therefore, most apps are focused on one or several regions.

Wrapping up

Ok, good. So, you know it. It’s time to get to business now. This article should be one of the first texts on P2P apps. It is designed to help you understand the field and make up your mind on whether or not to get into the business. Sure, you want to know more. Here is an article Explaining the rise of P2P Payments.




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