With the widespread use of mobile phones, mobile banking and Peer-to-Peer (P2P) mobile payment apps have gone mainstream. Wearables provide convenient access to such applications. Contactless payments services like NFC payments enable consumers to make everyday purchases quickly and safely especially for low-value transactions. Mobility, Internet-of-Things (IoT), smart homes are expected to augment the volumes of non-cash transaction volumes significantly. More than 15 billion machine to machine (M2M) and consumer electronic devices are likely to be connected by 2012. Some of the key areas to watch over are:
Peer-to-peer payment methods ease making small payments to nearby shops, friends or family conveniently through a linked funding source. It was PayPal that first started popularizing P2P payments. Many other similar payment apps emerged later that are involved in effortless money exchange with just a few clicks. Paypal, Venmo, SquareCash, Zelle, Google Wallet, Facebook Messenger are the 6 must-have payment apps in 2018.
If you’re out for dinner with your friend Sammy, and decide to split the bill, instead of fumbling for the change, Sammy takes out his card and you take out your phone. You decide the figures, open a payment app like Google Pay or an app like Paytm, search for Sammy’s name and send money to him. Sammy gets a notification as soon as he receives the amount.
Once Sammy receives the money, he can leave it in his P2P account for the next time it’s his turn to pay, or he can transfer it to his bank account. Most of the mobile payment apps work in this way, others may be slightly different.
Peer-to-Peer – A Simple Process
One has to follow some simple steps to utilize P2P services:
Image Source: www.consumerreports.org
Users of the mobile payment apps have to establish secure accounts with a trusted third party vendor. They have to mention their bank account details and credit card information that will be used to transfer and accept funds. Individuals can complete the process of transacting by making use of third-party websites or mobile applications.
The second method involves making use of an online interface or mobile applications to determine the number of funds to be transferred. The recipient has to get registered by their email address or phone number. Once the transfer is initiated by the sender the recipient receives a notification to enter their bank information and routing numbers into the online interface. The recipients are not required to have their account in the registered bank institution of the sender in order to receive the payment.
Every P2P system is legal and makes use of encryptions of every kind of financial information. Many mobile payment apps also take help of fraud monitoring and support teams to check out unauthorized transactions.
Users might have to wait for the money to get credited into their bank accounts. It might sometimes take up to 10-15 days as per the bank policy.
Sometimes the payments might cost some percentage of the transaction depending upon the payment methods.
The data has to be entered correctly as one single mistake can be costly and it cannot be reversed. If the money goes to a wrong person, there are fewer chances of getting it back.
Peer-to-peer transactions can be really useful in managing cash (they enable you to travel without cash), maintain quicker access in case the payment app is able to transfer funds immediately to your bank account.
Bank checks take 3-5 business days to clear, while cashless payments are cleared instantly. The remaining funds stay there in that third-party payment app until the user requests to move funds back into their bank account.
Developers have tried to make mobile apps in a way so that users are able to park the money in such mobile payments apps safely instead of hiding is beneath their mattresses.
What if I don’t want to reveal my bank credentials? You’ll always like it if it comes free! Free cash back, coupon codes and redeeming points – if payment apps provide such features which are not provided by other banks or financial institutions, then it becomes a great option for users who can avail such services without having prior knowledge of transactions or financial instruments. The reluctance of the users to be parted from their money gives instant goose-bumps. They always embrace a dedicated solution to rub out this idea. They don’t want to spend time in waiting for their accounts to reflect money.
Payments apps like PayPal usually cost (US): $18500 to $138,750
It might not be as simple to have a zero cash future as most of the financiers might have predicted, but some sort of it can be realized via numerous payment services that allow people to transact in real time without the need for checkbooks or cash withdrawal from ATM’s and banks. Services like PayPal, WeChat, Venmo, Square Cash, Zelle, Circle Pay, Google Pay/Google Wallet, Facebook, Popmoney, Dwolla, Snapcash are globally popular. These service providers have changed the way people use money in daily lives. But the ones which are highest-rated are those which have been taking care of privacy and security of user data.
Merchants look for an AR integrated payment gateway that delivers a superior customer experience, as they start providing Augmented Reality (AR) assisted shopping experiences.
Payments have become quicker, secure and independent of government influence. Whether or not they will turn out to be good or bad is yet to be seen but these have definitely worked towards making people’s lives better.
An increasing number of people have been embracing mobile technologies, online and mobile banking solutions to drive their e-commerce platforms and this has ultimately led to the popularity of peer-to-peer or person-to-person payments. Major banks, credit card companies, and financial institutions have now got into action and adopted this technology so as to enhance individual-to-merchant relationship to a broader individual-to-individual exchange.
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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.