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Money transfers should be fast and easy, without requiring lots of time or effort. The demand for P2P payment apps has increased due to these advantages. Using them is quick, hassle-free, and similar to exchanging messages with a friend.

People can conveniently pay each other through Venmo, Zelle, PayPal, and Cash App now. Even so, it’s always beneficial to explore new ideas, as the industry continues to evolve, especially if they are faster, more secure, and/or tailored for a specific group of users.

Follow these steps if you consider starting one.

What is a P2P payment app?

Essentially, it enables users to transfer money from their cards or accounts to others using their mobile phones.

It is not only about completing a deal. Using the Internet is a frequent part of daily life today.

A roommate pays half of the rent. My birthday money is sent by my cousin. After getting any kind of residential service, the customer compensates the business directly. You can do it in a short amount of time and often for free.

Every function and payment in the app helps you gain your customers’ trust.

Step 1: Know Your Target Market

Ensure you have a clear understanding of users before beginning to write code. Who are those individuals? What is lacking from the existing apps that their potential buyers look for?

For example, suppose your goal is to reach college students. Customers are looking for a service that is instant, has funny stickers, and does not require them to pay. It may be that your primary goal is to assist cross-border workers who wish to transfer money at low rates. That will take time to consider building a banking app that uses a separate engine under the hood.

The things your audience likes determine your technology, look and feel, and special offerings.

Step 2: Choose the Features

A good P2P payment application has certain key features.

Most users are asked to register with something like phone or email and submit proof of their identity.

• Link wallet — Users have the option to connect their bank account or card
• The main function is being able to send and receive money.
• Transaction history allows you to spot both money received and sent.
• Push notifications help inform people about new happenings
• PINs, biometrics and two-factor authentication are some of the security options you can use.

It is the additional parts that really distinguish your product.

Venmo offers a social feature that allows you to see payment notifications. Or you can buy and sell stocks and bitcoin using the Cash App. You can also add expenses together in groups and settle balances using PayPal or Venmo on Splitwise.

Try not to bring every accessory with you for the first day or it will take too long. Build your product as a minimum viable one and grow it from there.

Step 3: Select the Right Tech Stack

The system you build will depend on the platform: Android, iOS or you can cover both at the same time.

Swift is the main language used by default with iOS while Kotlin is used for Android. If you hope to improve both and cut your costs, go for Flutter or React Native, as they allow you to code just once and use your app on various platforms.

Back-end development mainly consists of the following:

• Choosing Node.js for swift development instead of Django
• Firebase or AWS can be chosen for their realtime updates and the ability to scale up easily.
• The database can be managed using either PostgreSQL or MongoDB.

The focus in this case is mainly on security. All transactions should be covered by end-to-end encryption. Ensure card data is tokenized and make use of the OAuth 2.0 method to authenticate users.

Step 4. Payment Processor

You have to ensure that your money is transferred safely from one person to another. It’s during this time that payment processors and payment gateways help out.

Some top choices in this category are:

• Stripe is easy to use, you can accept payments in different parts of the world and there are clear instructions provided.
• Braintree (PayPal) allows more types of payment methods than just credit cards
• Plaid helps with connecting external accounts and checking account balances
• If your solution is meant for US financial institutions, use the Zelle SDK.

When users handle grocery bills and pay by debit, you need a gateway that makes fast transfers and can quickly link with their checking accounts safely. Stripes and plaid together have this ability.

Step 5: Manage Compliance and Regulations

These apps are not something to ignore. It is essential to comply with financial rules in your particular area.

• KYC refers to verifying the identity of users in the system
• Suspicious patterns should not be taken lightly
• Security measures that must be met when handling card data are known as PCI DSS.

Depending on where your users are from, your data privacy system must follow either the GDPR/CCPA regulations.

If you handle money right away and not indirectly, you might also need to apply for a money transmitter license. What this looks like varies among countries and it’s even different from one U.S. state to another.

It is best to get assistance from in-house counsel early or choose a proven compliance vendor for this stage.

Step 6: Create a Smooth UI/UX

Building trust is an important part of design, in addition to being attractive. People should feel they can safely give their sensitive personal information.

See products with straightforward designs, fewer actions needed and no unclear responses anywhere.

If you need to send your friend $50, where should you go? You should not take more than 10 seconds to perform it.

• Do you want to review how much money is in your account? It is just a click away.
• Want to view details of payments you have made before? Select a timeline history that has filter functions.

Use animations, chosen colors and small bits of text as well. Once the money is taken from your account and the green checkmark and “Payment Sent” label appears, you feel more comfortable.

Step 7: Test, Test, and Test Again

There is more to testing than only fixing errors.

You need to check:

• Is cloud software safe from threats?
• Does the mobile app run quickly when there is a lot of activity?
• Is it simple for someone without technical skills to get the job done?

Make sure you check the game yourself first and once that’s done let beta testers try it out. TestFlight for iOS or Firebase for Android can allow users to give you feedback.

Step 8: Release and Promote the App

After finishing the refinement, it can go live without any problem.

Release the app in a smaller place or test it with a small group first and see how it works in the real world.

There are different marketing strategies that can be used.

• You can refer a friend to join and each person will get $5.
• Campus Ambassadors — When wanting to appeal to students
• Team-ups with influencers are mostly seen in the lifestyle or finance industries

It is clear that social proof supports what makes a business secure, simple and fast. Bring them up in your everyday messages.

Real-World Scenarios

When the mother learns her son is in the supermarket with no funds, she wants to send money immediately. She goes online, finds his name, uses $60 from her card, and everything is done.

During the weekend, some friends plan a trip together. We each take care of our own expenses: the first one pays for the gas, the second for the Airbnb. The app replaces showing or trading IOUs by allowing the person who owes you to pay you securely.

The freelancing website helps arrange payment for a brand logo from a foreign customer to the designer, who is a freelancer, in the designer’s currency and at a low rate for international money transfer.

Due to this type of P2P payment app, sending money directly to others becomes a fast, convenient, and easy process.

What Is the Expected Cost?

Costs are determined based on the features, complexity, and the approach to development, whether it is done inside or outside the business.

An MVP that has only the key features can be built at a cost of:

• For hiring good developers, the budget is approximately $30,000 to $50,000 for the entire process.
• The price range for an app with features, good security, multiple forms of currency support, and a unique design typically falls between $70,000 and $100,000.

The ongoing costs for any website include hosting, compliance, and maintenance.

In addition, if the service and its users suit the right niche, the ROI can be great as long as you charge a small fee or offer expedited transfers.

Author bio:

Yuliya Melnik is a technical writer at Cleveroad, a software development company that offers banking software development services. She is passionate about innovative technologies that make the world a better place and loves creating content that evokes vivid emotions.