As of 2022 and over the past decade, peer-to-peer payments have reached a global value of $121 billion. Their popularity is largely due to the numerous benefits they offer in terms of security and transaction speed. Do you know what they are and which are the best peer-to-peer payment apps?
What are peer-to-peer payments?
This is a payment system based on facilitating the transfer of money between two users via a specific platform. The key functions of these apps depend, to a large extent, on banks in order to be able to offer an appropriate service. Financial-regulation laws in various countries ensure that this payment method is effective and legal throughout the country in question.
However, there are other platforms that do not need to be affiliated with a bank to provide peer-to-peer or P2P payment services. In these cases, we are talking about websites or smartphone apps with a very different payment-regulation policy.
This type of platform has become increasingly popular in countries such as the United States, Mexico, Colombia, Brazil, and Venezuela, among others. One of the reasons for this phenomenon is that there is no need to provide a lot of personal information in order to register for these services, all you need is your ID or passport.
What is an example of a peer-to-peer payment app?
An example of a peer-to-peer transaction app is the PayPal website, which also offers an app available in the App Store and Google Play. This transfer system works like a digital wallet, which can be used for personal purposes or for the financial administration of an online business.
You can use PayPal to store money and transfer it to different users who also have an account registered on the platform.
The peer-to-peer money transfer model used by this app works in a very simple way. All you need is the user’s email address to be able to send your chosen amount of money.
Each transaction has a unique code that is stored and constantly monitored to guarantee the legality of the operation. In this way, PayPal protects both its users and its platform simultaneously.
How peer-to-peer payments work
Peer-to-peer payments work through software and hardware systems dedicated to fulfilling a single objective: creating a shared communication network.
To do so, millions of computers are used around different points and programmed to execute sequences within the same protocol. These networks carry out all the movements of money you can make from your phone to another user’s bank account.
In this sense, platforms such as PayPal act as intermediaries to validate the transactions made using the website or the app. One of the biggest benefits of this technology is that it is not necessary for the recipient to be part of the same banking network as the sender when sending payments.
That means you can transfer funds from an account associated with Bank Of America to a user with an account linked to US Bank, for example.
Peer-to-peer payment systems store all user information, from their identity number to their fiscal address. As a result, they maintain the service’s transparency at all times and guarantee that each transaction is carried out quickly.
The data is encrypted and secured so that no external agent can access it without first having to go through a firewall network.
Top 5 apps for peer-to-peer payments
Currently, a host of platforms offer peer-to-peer transactions, and their number is constantly growing. Some of the best peer-to-peer payment apps that we at PayRetailers recommend are as follows:
- PayPal. As previously mentioned, this service is one of the most popular throughout the world due to its ease of use and speed when making payments. Its account-verification system ensures that all peer-to-peer money transfers are secured at all times. It is also used commercially.
- Binance. The expansion of cryptocurrencies and online payments have made Binance one of the most practical options for any user. They have a secure system for payments between users using score levels for each person, which prevents fraud and provides confidence when selling any type of currency. In addition, they provide user verification and login methods that prevent unknown people entering the system.
- Venmo. This is an online payment system very similar to PayPal, though it does not require verification to carry out transactions.
- Zelle. Zelle is compatible with most global banks and facilitates transactions via email or phone number.
- Cash App. This P2P payment app is quite popular in the United States and Europe, as it offers various benefits. In addition to being able to send money to different users, you can also buy and sell Bitcoin.
Safety recommendations for using peer-to-peer payment apps
To help you enjoy a positive experience with peer-to-peer transaction platforms, we suggest the following:
- Check that the account that you are transferring to or receiving money from is safe or that it is properly verified by the system.
- Avoid transferring amounts of money that exceed the limit imposed by the app.
- Do not provide personal information to any user on the app.
- If you have an online business, provide all the necessary financial information to the platform when requested.
- Do not use false data when registering on the system.
At PayRetailers, in addition to providing valuable information, we also offer a P2P payment service to effectively secure your money. We offer services to business owners and users who want to place their capital in the very best of hands. Wait no more—join our platform today!