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How to Create a Peer-To-Peer Payment App Money Transfer

01 May 2023 updated
11 min

Table of content

Peer-to-peer (P2P) payment apps for money transfers have become increasingly popular in recent years, enabling users to send and receive money quickly and conveniently without the need for intermediaries.  These applications allow users to exchange money without using their bank accounts and official banks.

By starting now and adding your brand to the map of P2P apps, you can naturally merge into the industry. Building a P2P payment app requires a deep understanding of blockchain technology, mobile app development, and payment processing.

In this article, we will explore the key components of a P2P payment app, including user authentication, payment processing, and transaction verification. We will also discuss the challenges of building a P2P payment app and provide practical advice and best practices for building a secure and reliable P2P payment app.

Before you develop a P2P payment app

To launch a P2P payment app successfully, you need to develop it. And, in fact, the money transfer app development will be the easiest part in terms of the process. What comes before the development begins is much more complicated and can be even more critical as development steps depend on the development plan you create. So to build a P2P money transfer app, first, you need to:

  • select its type;
  • define what problem the app will solve for end-users;
  • set the features list;
  • shorten all the data into a brief.

Types of Peer-to-Peer Payment Apps

Standalone apps

Such individual companies work to facilitate money transfers for their users. So an app like Venmo by PayPal offering in-app e-wallets and synchronization with the bank car/account are the perfect examples. These services can hold the user’s money until the withdrawal to the bank account is made.


Bank-centric P2P apps can be DeFi or Open Bank apps that use bank’s data to run or bank-native applications developed specifically for the bank’s needs. Basically, bank-centric P2P apps are designed to speed up and/or facilitate client’s experience with the bank in a larger context.

Social media P2P

Such apps are found within social media platforms, like Facebook. This software is rarely developed outside of a social medium, and it is limited by the website’s users. Social-media-centric applications guarantee better transaction safety for the platform users, yet we would recommend staying out of such projects as they have little space for improvement.

You might also hear about the integral Android (Google pay) and iOS (Apple pay) systems. These are not applications but rather native features of an OS. Since you cannot create a new OS payment feature, skip them in your thoughts on how to make a P2P app. However, this kind of integration can be heavily exploited in blockchain-based games where players exchange goods, game artifacts, purchase new features, etc. This can be a brand new niche for P2P exchange apps, so you can consider getting it this way as well.

What Your Money Transfer App Needs To Do

There is a wide range of features a P2P app can have. But when you build a P2P payment app, you should accommodate end-users needs to develop a product that satisfies them. So here is what a P2P app can allow your customers to:

  • make payments on an installment plan;
  • pay for internet, utilities, and any other services (where online payments are accepted);
  • send money to 3rd parties (as a gift, for example);
  • send/receive/fulfill a borrowing request from a 3rd party user (friend, family);
  • control withdrawal/payment limit, frequency, or timing of a 3rd party (account co-holder, child);
  • pay for a restaurant/grocery in full/split;
  • pay for transport services (including taxi);
  • send/receive money cross-border at low rates;
  • exchange currency.

The P2P transfer apps can be closed around a family and its friends or go internationally and span a much greater audience. Regardless of the option, you decide to go with, there are particular features that need and should be found in your app.

12 Must-Have Features for P2P Money Transfer App

When we talk about P2P payment systems, please keep in mind that these are not just fiat currencies that need to be included. Tokenization is at its full evolution, and cryptocurrencies continue taking over the world. Your goal is to make all these currency types available in your product. Of course, you can start from fiat and move to crypto and tokens later. Yet, always remember that today IoT, AI, and blockchain merge in dozens of industries, and this is the true future of P2P apps.

12 must have features for an efficient P2P payment system

So let’s review the must-haves:

  1. Make/share payments: This primary P2P feature lets users make real-time payments to third parties with no service fee.
  2. Create/send/accept bill, invoice: The app might start by allowing a user to send a bill to a person who has to pay for it. But later on, consider adding an in-app invoice/bill builder for a smoother in-app experience.
  3. Unique transaction ID and one-time password: With any kind of financial software and apps, security is the top concern for every developer. So implement OTPs for transactions and always use unique IDs for the sender to have another second for data verification.
  4. Data encryption: This is a must in all types of payment applications. You need to ensure that even if some data gets stolen, hackers won’t be able to decrypt and use it for their purposes.
  5. Strong authentication: To protect an account from identity thefts and data leaks, make people use secure log-in authentication (two-step, confirmation codes, fingerprints, etc.)
  6. Linking banks/cards: It is hard to make payments online if you cannot connect your bank account/card to a P2P money transfer payment app. Otherwise, they will have to top up their wallet, then connect it to your app, and only then make a payment.
  7. Track payments: This is a truly important feature! Payments tracking not only improves UX but may also be required by law in some countries.
  8. Sync with contacts: This is not a must-have, yet, a nice-to-have feature. It’s more convenient to tap on a person’s contact on the list rather than putting in all their details for each transfer.
  9. Account settings: They improve UX as well. When a user can customize their preferred payment method and manage their data, it becomes easier to use a new app.
  10. Notifications: They help ping users about a new transaction, lending request, or upcoming payment due date. The app allows the user freeing their time for more important things.
  11. Chatbot: This feature can spare your customer support team from mundane questions. Let your users help themselves before humans step up.
  12. Admin panel: Being useless for end-users, an admin panel can help you, as the owner, control the app’s operations and resolve any issues.

Top questions to answer before money transfer app development

You are almost done with the preparation stage, so it’s high time to make the last step and consider these four questions.

Who is your target audience?

If you decide to go with an app like Venmo, you will have friends and family as your target audience. PayPal or Revolut took the whole world as their target audience. You may go with a niche of families with kids or elderly parents to become a leader of it. But first, you need to understand who you will be going after.

What problem will you be solving?

To build a P2P money transfer app, think of a problem your app will solve for your target users. Search for it through surveys and then create a way to solve it. Remember that the market is getting filled pretty quickly, so think fast yet thoroughly to find your own recipe of success.

How will you make your app friendly?

Statistical research of FinTech applications usage showed that ‘ease of use’ or user-friendliness is among the top factors of app adoption. Your application needs to be better than the market’s offer, so ensure that it is quick and intuitive. Test it with different target groups to see the issues in user journeys and inspect people’s confusion that needs fixing before the launch.

What services will it connect to?

We have already said that any peer-to-peer payment application needs to be connected to banks, cards, e-wallets, crypto platforms, etc. You need to define this list of connections before you go into development, as their specifications will directly impact how your own app needs to be built.

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How to Develop a Peer-to-Peer (P2P) Payment App

In a nutshell, the creation of a P2P money transfer app is the same as traditional application development. Yet, as you have already learned, there are specific steps that you can find only in this type of application. So let’s briefly review the steps.

The process in short

Tips for creating the best P2P app

At 4IRE, we have been working in FinTech for more than 10 years. We have consulted on a number of projects (from blockchain development from scratch to payment and booking apps), and over the years, we made some mistakes. But we want you to make the best of your P2P payment system, so here is some insight on making your application a success.

Choose the right technology with the future in mind

When you launch your MVP for a money transfer app, everything will be fine. Then, you will add a layer of features, then change them again, then improve the UI, and all these updates will add new app layers. We’re not saying that this is bad, but sooner or later, it may come to overload your application and hence disrupt its smooth operations. What we mean here is that you need to plan for expansion and growth from the very beginning. Consider your backend options, think over the architecture, and even get an external expert to evaluate the risks of your plan and implement the safest database possible correctly.

Support major payment methods

Your users will need to make instant payments and exchange funds with their friends and family. Each of them will have their own currency, bank, wallet, card, and preferred payment method. To ensure that you don’t lose any market segment, you need to accommodate as many payment methods as possible (without overloading your system).

Support major payment methods

Complying with the law

Financial regulations for FinTech, in general, are still somewhat vague in most countries. There are regional directives and approvals you can apply for (listed below), yet we strongly recommend getting professional legal help before launching a P2P app in a particular country. Search for the local financial and FinTech law expert to ensure that all your papers are in order. Here is what you might consider doing first:

  • For China, get approval from the FinTech Committee under the People’s Bank of China (PBOC).
  • For Korea, get approval from the FinTech Center under the Financial Services Commission (FSC).
  • For Singapore, get standard licensing for the financial market, adhere to AML/CFT notices, and keep up with the personal data standards and PDPA.
  • For Australia, get approval from Innovation Hub by the Australian Securities and Investments Commission (ASIC).
  • For the US, get legal help as each of the 50 states has local legal rules, and there are eight different federal agencies in the regulation of FinTech.
  • For the EU, read Directive (EU) 2015/2366 and the GDPR rules.
  • For the UK, get approval from the Financial Conduct Authority.

Disclaimer: Please note that this data is provided for informational purposes only. It should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this article without seeking legal or other professional advice.

3 P2P challenges and how to resolve them

And in this last section of this P2P payment app development tutorial, we wanted to warn you about the most common challenges young entrepreneurs face when creating their first applications in the FinTech world of P2P payments. You know, forewarned is forearmed.

Online Money Transfer App Monetization

You are definitely not creating the best P2P app just to make it live. Sooner or later, you are probably willing to turn your idea into money. And this is where the challenge might come. Here are the options you have:

  • Transaction fee: You will be taking a small percentage for every transaction fee. It’s easy to implement and integrate yet might put aside some of the target users.
  • Advertisement: This one is easy to implement as you will simply leave some space in the UI for ads. Your users will get used to it, yet, such monetization will not bring instant income, and it is time-consuming (you will have to check all ads manually).
  • Paid subscription plans: You leave the app as it is but offer premium users some perks. Paid plans go well with either of the above monetization options to be an additional layer of income.

App monetization

Security of users’ data

Security in FinTech has always been a challenge; this is why more and more teams hire a blockchain developer to redesign their backend. As a young business, you cannot risk losing your users over a hacker’s attack, so our tip is to always comply with PCI DSS. We won’t go into many details, but you need to preserve continuous app testing and monitoring to spot any vulnerabilities early in the day and hence secure confidential user’s data with the updated policies.

Disputes settlement

Sometimes troubles with transactions may appear after you create a money transfer app. When a sends any money amount to another user, and the recipient doesn’t receive it. And the technical glitch may be the reason for it or some other problems. What should they do? Your P2P payment app should have the availability of financial support where the special department will sort out this issue and settle the dispute to return all funds to the recipient.

The bottom line

Now you are ready to get going with your P2P mobile payments app development. You have a list of features, the steps to follow, and the hidden risks debunked above. Remember that the market of P2P payment apps grows every day and it is the perfect moment to join its ranks, especially when there are so many blockchain platforms available today. 

Our last tip is not to build an app like Venmo, this place is already taken. Create your own unique application to solve the most painful problems of your users. And if you need help with blockchain, P2P, or AI for financial purposes, our team is here for a consultation or partnership.


What are the key components of a P2P payment app?

As a rule, a p2p payment app should have a convenient user registration and login form, a function of billing and invoicing, and an opportunity to link the account with the user’s bank account or wallet. Some apps also have user notifications and push-up updates on the statuses of their transactions. It’s good to have a two-factor authentication feature to keep the user funds secure from unauthorized access and to provide a detailed transaction history for the convenience of record-keeping. 

How can blockchain technology improve P2P payment apps?

There’s much blockchain technology can offer to the p2p payment industry. First, it is the speed and convenience of cross-border transactions. Most conventional p2p solutions charge considerable fees from the users for sending and receiving funds (e.g., PayPal), but blockchain fees are much lower, allowing users to save on money transfers. Second, blockchains are much safer than the usual digital resources, as they utilize the public ledger technology for transparent and immutable recordings of all on-chain transactions. Finally, p2p transactions can get way more confidential with the privacy and absence of centralized intermediary oversight blockchain can give to users.

What are some best practices for building a money transfer app?

To make your p2p payment app successful, you need to integrate the most demanded features into it, matching the latest market trends and user preferences. Such features include integration with other financial services to guarantee service coverage versatility to users, expansion into international markets for the sake of global transaction coverage, and the use of AI/ML and blockchain in p2p architecture.  

What are the challenges of building a P2P payment app for money transfers?

The major challenge any P2P app developer faces is the need to provide end-to-end user security. Such apps should guarantee secure personal information storage, provide rigorous access control, and feature a detailed security policy. Regulatory compliance is another challenge, especially for apps operating across multiple jurisdictions. International payments may also pose a challenge for the app’s designers, as the software should have a fair currency conversion rate updated in real-time based on multiple currency rate sources. Setting up a workable dispute management system within the app is critical so that dissatisfied customers or users experiencing problems with their transactions have a quick and efficient reference point.

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