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As a result, PayPal, Venmo, ApplePay, and other payment apps appeared. The mobile payment industry was worth $1,78 trillion in 2019 and is expected to reach $12,06 trillion in 2027. It has become especially popular in South Asia and peaked during the COVID-19 pandemic. 

The use of payment apps is expected to grow, with a compound annual growth of 26,93%

Do you want to try a hand at this fast-growing trend and offer your own mobile payment solution? We have got you!

In this blog post, Devox Software will share its extensive experience in fintech software development and will tell what a P2P payment app is and how it works, list its pros and cons and present different types of payment solutions. We have also created a step-by-step guide on how to create money transfer app, what features it should have, and how to address payment app development challenges.

What Is a P2P Payment Application?

Peer-to-peer, or P2P, payment apps were designed to quickly send or receive money directly to or from another person, using a bank account or a credit or debit card. 

You can do so by using an app on your phone, and you need very little effort and information about the receiving end to make a transaction.

How Does the Payment Application Work?

On the user’s side, the process is very easy:

  • They choose the P2P app, install it, and register. They also connect their bank account or card and protect their accounts with a password. In some cases, they just load some money into the account without connecting it with the actual bank. 
  • When users want to make a transfer, they just need the phone number or an email of a receiver. They put in this one detail and a transfer amount, confirm their decision by entering the password again, and it is sent. The payment proceeds within a minute or a couple of hours, or it takes up to three days, depending on the chosen app. 
  • In some cases, users can also request money, in the form of a loan between two friends or a reminder to pay the split bill at the cafe. It is a little bit more complicated on the application side. It has to send a request to the bank or the card issuer, process the payment in a gateway, and get back to you with a result and to the receiver with the money.

Advantages and Disadvantages of Peer-to-Peer Payment Apps

P2P payment apps are commonly used these days: in 2020, 1.18 billion people used them, which is a growth of an astonishing 22,2% compared to 2019. 

Some people really enjoy it, but others have mixed feelings about the P2P payment solutions. Let’s take a look at the pros and cons of these apps to see why it is so.

Advantages of a P2P Payment Application

  • Quick and easy. It is extremely easy to sign up and start using the P2P app. The transfer is also surprisingly uncomplicated: you do not need IBANs, bank names, addresses, and BIC. You just need a name or a phone number. It is slower than cash but much faster than any other cashless operation. 
  • Low costs. Transactions are happening online, and you do not need a middleman to help you. As a result, the transaction fees are either extremely low or non-existent. It is also very cost-effective in terms of currency exchange since the conversion rates are usually lower. 

Extra features. Numerous payment solutions have extra features like requesting money or keeping track of your finances. So it is like having a basic version of a fintech solution that lets you control your budget seamlessly.

Disadvantages of a P2P Payment Application

Security. One of the main concerns when it comes to P2P payment solutions is security. Even though you may not lose much data, you can lose all your financial savings. Therefore, either users go for very established and reliable solutions, or you have to make a huge effort to make them believe that you are offering a secure solution.
No refunds. If you send money to the wrong person, you can not have your money back. At least, it will be extremely difficult to get those back. Some small businesses also use P2P payment solutions to avoid taxes. If you stumbled upon a fraud, you would not be able to prove anything since you used a P2P payment.
There are limits. Within many apps and banks, you are likely to run into the limit of how much you can transfer a month. It can also happen that the person does not have the same P2P app as you and, therefore, it will be impossible to transfer funds in some cases.

Challenges You May Face While Creating a Payment Application

P2P payment solutions are a challenge. Besides regular challenges like growth bottlenecks or competitive markets, it has much to do with security and contact with banks and card issuers. It is important to be ready for this before you get to work. 

Let’s look at the challenges while developing a P2P payment application.


It is sometimes disregarded by other platforms that do not deal with much customer information. However, it is essential in P2P payment app development since it is about funds. If the solution has common web application vulnerabilities, the company will face huge fines. 

Therefore, one should think of cloud security, privacy policy, reliable APIs, regular updates, and other modern security measures.


The app should be able to protect not only the app as a whole but individual users as well. It is important to take care of multi-step authentication and encryption to avoid fraud.


There are regulations within any software development. It is all about iOS and Android regulations, data protection policies, etc. However, P2P deals with finance, banks, and credit cards. They are heavily regulated and have standards for security, card standards, money laundering regulations, etc. You do need to get the legal team involved as early into the development process as possible.


Developing a P2P solution is very different from developing a habit-tracking app, for example. It is much more complex in terms of regulations, features, securities, and technologies. You need knowledge of e-wallets, blockchains, encryption, APIs, different data formats from different banks, etc.

Types of P2P Payment Apps

Before starting the money transfer app development, it is crucial to choose the app type you want to implement. The further plans and features will depend upon that.

Bank-Based Apps

These apps are usually developed for a single bank. Its clients can manage their bank accounts and credit cards and easily transfer money to other bank accounts. It has become a standard practice within banks to develop their own apps.

Standalone Services

This type is a single ecosystem that does not rely on banks. They have their own digital wallet where you can upload and withdraw money and work with them however you want. PayPal and Venmo follow this model.

Social Media-Based Systems

Social media platforms are doing everything to allow users to shop without leaving the app. Therefore, they develop their own payment systems like Facebook and WhatsApp. This type of P2P payment is just emerging, but we are likely to see more of it in the future.

Based on Mobile OS

Apple, Samsung, and Android created their own payment systems. However, they feel more like built-in features than the whole other app because they are built on hardware capabilities like NFC.

Features Payment App Must Have

You can create your own unique solution. However, no matter the idea or the app type, you should include the following features to make at least the basic experience:

Transfer Feature

The transfer feature is what the app is created for. The users should be able to send and receive money effortlessly and quickly for the app to make sense.

This feature needs a perfect balance between asking for too much information and not asking enough. For example, if it is a phone-based transfer, it is important to include a country code but not ask for the full name of the recipient.

Requesting Money

This feature has become popular after Venmo got introduced. The users should be able to split the big sum and send equal requests or send single requests with accurate amounts. 

It is also important to add a business invoice feature for payment collection or bills for external services.

Transaction History

Users should be able to see when they received or withdrew money so that they can plan their budget or notice any peculiar activity. 

However, make it possible to search the history not only by date but by recipients as well. Users often get angry while scrolling to find the payment they transferred a month ago.

Customer Support and Chatbots

Many people will need help with onboarding or navigating new functions, some will look for someone to fix their issues with wrong payments or bugs. Make sure to create a profound chatbot to save budget in the long run but always offer an option of talking to a real person.


The users should immediately receive notifications when they receive money or the money has been withdrawn, or when there is a new invoice or response from customer support. You can also send notifications with budget analytics but the users should be able to turn off that one.

Currency Conversion

The more the user can do within the app, the more likely they are to download it. Let them exchange currencies safer and faster. It would be also nice but not entirely necessary to add a cryptocurrency exchange option.

Spending Analytics

This one is also not a must but it is nice to have more features. Let users see how they spend and receive money and track paid or forgotten bills and requests.

Steps to Build a P2P Payment Application

Payment app development is a little bit more than writing code and following core startup stages. Let’s see what else you need to do.

Research the Market and the Audience

A good and smooth development process includes a lot of planning, and research is a huge part of it. 

Make sure to know what your competitors are doing and what your target audience is craving. Become a user before becoming a solution provider to learn what features in popular payments are useful and interesting, feel what they are lacking, go to the reviews section and see what other people like and do not like about different P2P platforms. 

It is also extremely important to conduct technical research to see what stack works the best for P2P payment apps and more importantly, what security policies and regulations you need to follow.

Create a Roadmap

In the roadmap, it is important to write down your stack, preferred time sizes, all the features and details, banks, currencies, languages you want to work with, etc. It is important to think about security and UX/UI at this stage, since building an application with those in mind will make a much more secure and usable application and will save a lot of trouble in the end. 

It should also include clear stages of development, deadlines, and budget. It will help you to keep everyone informed about what should happen and when, as well as deliver the product on time and stay within your budget.

Develop an MVP

An MVP, meaning the most basic version of your app, will help you to test the hypothesis you developed during the research stage and fix something if needed. It is better to make changes when the app is at its starting point, rather than when it is complex and solid. 

At this stage, it is important to fix the bugs pointed out by testers but also work with the audience. Ask them to complete small surveys about the product to understand their needs and frustrations better.

Launch and Continuously Improve Your App

Software is not a product that can be done and left alone. It is important to monitor the reviews to fix bugs and watch the market closely for new features.

It is also important to roll out security updates and monitor any possible breaches at all times. 

Therefore, make sure to hire a team with a long-term perspective in mind.

How Much Does It Cost to Make a Payment App?

There is no fixed price for developing a payment app. The total will vary between $100,000 and $150,00 for an MVP alone. Here are the approximate pricing for each stage of product development:

MVP Mobile Banking Product Standard Ready-to-Market Banking App Custom Mobile Banking Application with Advanced features
Research Phase, Estimation & UX/UI Design 120 – 140 hours
4800 – 5600 USD
160 – 180hours
6400 – 7200 USD
200 – 240 hours
8000 – 9600 USD
Mobile App Development 120 – 140 hours
4800 – 5600 USD
600 – 700 hours
30000 – 35000 USD
900 – 1200 hours
45000 – 60000 USD
QA Testing & App Launch 90 – 120 hours
3150 – 4200 USD
140 – 170 hours
4900 – 5950 USD
240 – 360 hours
8400 – 12600 USD
Total 610 – 810 hours
27950 – 37300 USD
900 – 1050 hours
41300 – 48150 USD
1340 – 1800 hours
61400 – 82200 USD

The gap is so big since the cost depends on numerous factors: app type, the number and complexity of features, the number of integrations, deadlines, and the quality and location of the team. If you are looking for the option with the most extensive customization capabilities, feel free to contact Devox Software for web development services.

However, it is also important to keep in mind that you will have to continuously improve the app and work with the legal and marketing teams to get the app going. Therefore, make sure to include these pieces in the budget as well.

Develop a P2P Payment App with ​​DevoxSoftware

A P2P payment app development is an exciting and promising project. It is likely to bring you revenue in the future, especially when it comes to lending functionality that is growing in popularity at the moment. 

However, it is important to wage all the costs and risks before starting. It is quite an ambitious, costly project that can take a while before it gives back. 

Do you need a trustworthy web development services provider to help you with the planning and development of your future P2P payment software? Do not hesitate to reach out to ​​Devox Software. We have fintech experts and experienced security professionals with an extensive portfolio of successful cases who will help you create the perfect solution in no time. 

Thus, contact us and let’s build a future most popular P2P payment app together!