Squaring App Development With P2P Payments App Like Cash App

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Get acquainted with the latest P2P Payment apps; features, technical frameworks and challenges while building them!

Reviewed as one of the best peer to peer payment app, Cash App has eased out the way people used to make payments. It has stashed away the need to keep handy cash or cash cards altogether. The least it needs is an active internet connection and the payments are as easy as cutting a cake slice.

It is easy to make payments nowadays as compared to early ’90s. The reason these digital payments are recommended and legalized is that these have inspired paperless transactions and are thus bio-friendly. A lot of paperwork is reduced. The palpitating feeling of borrowing and owning someone’s money is no-more scarier as payments are superfast and easy.

What are P2P Payment Apps?

p2p payment

Peer to peer payment apps allows customers to access their bank accounts with just pin access, without the hassles of actual login via user id and password. These apps ease out transactions, with lucrative discounts and cash back, such that an increasing number of people are willing to make use of these. The money that is sent or received via these payment applications, can be sent directly to customer’s bank account or can be left in P2P payment app wallet, which can be used in future for more transactions.

App development firms consider three categories of P2P Money Transfer apps, before sketching out their own version:

  • Standalone Services (PayPal and Venmo)

Such P2P vendors have their own mechanism (wallet feature) of dealing with money. They do not rely on banking institutions for transacting money.

  • Centered around Bank (Dwolla, Zelle, and Popmoney)

These are another kind of P2P vendors that involve bank while dealing with money. They facilitate the money transfer through its partner bank and credit unions.

  • Partnered with Social Media (Facebook Messenger, SnapCash, Google Wallet)

Social media applications integrated wallets just to ensure that their users stay hooked to their apps and can still make their payments. These apps can directly access their bank accounts with a small authentication along with OTP, but the greater hassle of remembering CVV in order to make payments via debit or credit cards is removed.

See Also: How Much Does It Cost to Develop a Mobile Wallet Application?

Status of P2P Money Transfers

  • The transaction values in the P2P Money Transfers have always shown a speedy growth.
  • With an annual growth rate of 19.0% (CAGR 2019-2023), the total amount of P2P money transfers will be US$2,249M by 2023.
  • The number of users making use of P2P Money transfer apps is going to reach 5 million by end of 2023.
  • The average value of transaction per user in the P2P money transfer segment is valued at US$220.1 in 2019.
  • The highest transaction value via this mode of payment has reached close to US$18,616m in 2019.

total transaction value

Image source: www.statista.com

Total Transaction Value in the P2P Money Transfers segment is estimated at US$1,123m in 2019

So How Does Square Cash (Cash App) Work?

Square cash app is free to download and use – to send or request money. Apps like Square Cash earn by charging business transaction fees for using its software. The company charges 2.75% of the fees for every business transaction that is done via its application.

how cash app works

Square Cash offers some expanded set of features to its individual customers, those who wish to use it beyond the free version already available.

The square cash application also charges 1.5% of the payment amount, to transfer the funds immediately (directly to the bank) instead of keeping the customers waiting for the standard number of days to reflect the amount into their accounts.

Some More Apps Like Cash App

  • PayPal
  • Venmo
  • Zelle (ClearXchange)
  • Google Pay (Android Pay)
  • Facebook Messenger
  • Apple Pay
  • Alphabet Inc.
  • Metal pay
  • Circle Pay
  • Pop Money

See Also: 5 Most Dependable NFC Payment Apps

Target Hunting: Will apps like Cash App and Venmo continue to regain popularity?

The rise in the usage of Peer to peer transactions has given the required freedom to users and have negated the necessity to add the beneficiary account before transacting. Plus, the users have the option to choose and select from the countless services. Some applications even provide free movie tickets or lucrative cashback upon completing the required number of transactions.

People make use of peer to peer payments apps for paying utility bills, recharge and bill payments, gifts and cashbacks, banking and insurance, healthcare, booking cabs and food orders etc.

One of the reasons for the increasing popularity of p2p payments apps is because these have reduced ATM visits. Users have got rid of the restriction of transferring large amounts amongst themselves without the interference of banks.

P2P Payment apps come with these common features:

  • Unique ID/OTP: A unique ID or OTP is must to get registered with the app and initiate any transaction. Third party SDK’s like Twilio, Firebase, Digimiles, Nexmo are used to secure this feature.
  • Notifications: To notify a user when a transaction has been initiated, when the money has been debited from the sender’s account and when the money has been credited into the receiver’s account. Technical frameworks used to implement this feature: Rest APIs, Chrome notifications, Amazon SNS, APNS, and Firebase Cloud Messaging etc.
  • Sending Bills and Invoice: A feature to scan and send bills to the app user. To implement this feature – Rest API’s or Bamboo invoice are used. This feature is also implemented manually within the app.
  • Transaction History: History of transactions is shown in the app directly via REST API’s.
  • Chatbots:  Virtual assistants must be implemented to rescue users at the time of disputes in transactions. These can be implemented via third party SDK’s like Zendesk (in native apps), Socket C, Microsoft Bot Framework, Wit.ai, Api.ai, LUIS, Chatfuel, Facebook Messenger Chatbot, and Amazon Lex etc.
  • Transfer of Amount into Bank: This must be implemented via Braintree payments, authorized .net, ACH, Dwolla stripe etc.

Challenges with Peer to peer money transfer apps:

  • Security – These applications are always feared to get hacked by trespassers.
  • PCI DSS – It is mandatory for all the peer to peer payment apps to follow this compliance, stay updated, and maintain strong security standards.
  • Currency Conversion – Calculation and conversion of currency in real time stands to be one of the biggest challenges that are faced by P2P payment app

Apart from these, going hand in hand with upcoming techniques like cryptocurrencies is also a matter of choice and optional upgrade by these Fintech apps. To know more, explore our previous use case on P2P payment options. Consult our experts for P2P app development services.

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About Author
Neeti Kotia

Neeti Kotia

Neeti got her master's degree in software engineering in 2009 and has been working since for software companies of all sizes as a technical writer. What started as a high school passion has now been converted into a serious profession. She has a special knack of learning from all verticals and imbibing the extracts into her writing. She enjoys learning technical aspects of writing from her tasks where her experience and understanding are most impactful.

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