The key types of P2P payment apps and why they matter

Have you used Zelle to pay back a buddy for that beer he bought you? Perhaps you’ve used Venmo to pay for your half of that beach-side hotel room. If so, you’re well accustomed to P2P payment apps.
According to statistics, there are about 82.5 mobile phone P2P payments conducted in 2018 alone. That is about one-third of the mobile phone population in the United States. By 2022, it is expected that about 52.5% of mobile phone users will make at least one P2P transaction per month. Obviously, these P2P payment apps are gaining momentum in our increasingly more mobile-based world.
P2P allows people to transfer funds easily and securely, but why do they really matter? More importantly, what is the main types of P2P payments available today? Let’s explore down below.
Why do P2P payment apps matter?
Whether you’re looking to develop instant P2P payment app or simply want to know a bit more, it is important to consider why these apps matter in the first place. P2P or peer-to-peer payments are transactions transferred from online or mobile apps to another app. They can be payments for rent, lunch, a car, or even a ride around town.
One person can easily transfer funds from their bank account or credit card at the click of a button. These P2P apps matter because they make it possible to transfer funds between two disparate banking owners, even if they bank with different platforms or use different payment systems such as Mastercard or Discover.
Before P2P, transferring money between bank accounts was a convoluted and lengthy process. Paying someone back or transferring money meant speaking directly with the bank or hitting up an ATM and hand-delivering cash to the other party. P2P means transactions are instant. No wait times, no physical contact, and zero involvement from your cranky bank teller.
Types of P2P payment apps
You may know certain brands of P2P payment apps such as Zelle or Venmo, but do you know the actual types of P2P? Below, you’ll find the main types of P2P you’ll encounter while developing a P2P app or simply enjoying their convenience.
Banking services
One of the most common types of P2P apps is banking services. Today, many modern banks are keen to provide account holders and clients with P2P apps that make payment a breeze. Examples of bank-centric P2P apps include Dwolla and Zelle. To utilize each, you must have a functioning bank account with a key provider.
Discrete service P2P
Venmo and services like PayPal are independent and aren’t linked with specific banks. Instead, they provide users with an electric wallet so that they can easily perform payments via their individual banking cards. Typically, both Visa and Mastercard are supported, but the particulars come down to each P2P service. Discrete P2P allows you to keep your money in your electronic wallet without having to withdraw to a bank account.
Social media P2P
Should social media platforms be used to send payments? That’s up for debate, but they are used as a means to conduct P2P payments regularly. Many social platforms allow users to send a specific sum to a friend directly from a messenger platform. An example of this is WhatsApp, who launched a P2P system in India which is surging in popularity. Of course, developing an app of this nature does include some inherent risk and maybe a bit trickier than other P2P apps.
Mobile OS P2P
Odds are if you want to develop an instant P2P payment app you’ve heard of mobile OS P2P. This includes services such as Apple Pay and Android Pay. These are not technically apps, as they are features integrated into the device itself. This technology allows for contactless payments while sending money to other users of Android or Apple Pay. It is an inside system and not quite as open as Venmo. Users can also pay at accepted terminals in physical stores.
The takeaway
P2P systems aren’t going anywhere and will continue to surge in popularity in the coming years. As contactless payment and quick transfers abound, P2P services (specifically banking and discrete) will garner even more support among mobile users.