'Oops! Forgot My Wallet at Home. Can I Pay You Later?'
This excuse may sound redundant, especially in 2022, with such a high increase in acceptance rate for digital cash.
Additionally, the Digital Payments Segment will reach US$8.49 Trillion in 2022 as stated by one of the leading market and consumer data providers; Statista.
On top of that, a new breed of apps, P2P Applications, is taking over the digital payments market.
To give you an idea, one of the most popular P2P Payments Service Applications, Cash App, generated "$12.32 billion of revenue and $2.07 billion of gross profit, which increased 106% and 69% year over year, respectively." as quoted by SEC's website.
So, if you're an entrepreneur looking for the next big thing, a P2P Application like Cash App can be your source of inspiration.
But, the transaction, which takes just a couple of seconds to process on the outside, is not so easy to execute on the inside.
Let's look into some of the internal processes and related data, which may help you decide better.
What Is a P2P Application?
A P2P Application uses a peer-to-peer (P2P) network, unlike the traditional client-server network.
The data here is stored on every device connected to the network (called nodes or peers) and not centrally on a single server, giving the end user more power over their data.
There is considerably less cost in building the infrastructure, as you'll save on the cost of maintaining servers, hiring highly skilled technicians, and much more.
And most importantly, the chances of failure in the P2P network are less likely or negligent.
Even if a node (peer) in the network gets affected somehow, it does not mean that the whole system would be corrupted; it just means that one single node will not be available until fixed.
Which makes a P2P Payments Application such a lucrative business to venture into, with low setup costs and high-profit margins.
But that's not something you'd tell your user base to get them to use your payments App, right? It's not of use to them.
So, what makes the P2P Payments App so appealing that it generated such big numbers in profits for the likes of the Cash App? Let's check that out.
Why Are P2P Payments Applications On a Rise?
While we can quote a dozen reasons to support the cause, we'd like to focus on the most prominent one: user data confidentiality and ease of use.
While using a P2P Payment Application, a user need not share the complete banking details, but instead, the payment can be made using the recipient's email address or phone number./
That's pretty much it. Wait! Before you lay out plans for your next P2P Application like The Cash App, we have to tell you the negatives too.
Challenges Faced When Developing a P2P Payments ApplicationLegal Compliances
If you want to enter the world of Fintech, it's widespread that you'd have to face a lot of heat from the legal side.
You have to be highly vigilant in how you operate. After all, it's a matter of the hard-earned money of the common folk you're dealing with. The government will be highly involved to ensure you're doing it correctly.
You'd have to take approvals from FTC (Federal Trade Commission), follow Anti-Money Laundering Regulations (AML) and Electronic Funds Transfer Act while taking care of the General Data Protection Regulation (GDPR), along with many other things.Secure Data Management
If Paypal, one of the world's most used payment service providers, could be hacked due to underlying vulnerabilities. Chances are that any other P2P App could also be a target.
Thus, data security stands as one of the most prominent challenges in this space.Currency Conversion
If your P2P Payments Application supports cross-border transfer, it must be good at currency conversion. And the rate at which currency changes value is very rapid.
Now, in the case of Paypal, it can easily support international transactions, as it takes up to 3-4 days to transfer the amount to your bank, which is a lot of buffer time to do the maths.
But in the case of a P2P Application, the transactions need to be in real-time, and the buffer times are generally in seconds, so that is a problem you'd want to have a solution for.Dispute Settlement
In cases of dispute, you need to have a pre-prepared strategy to resolve it. Failure to do so will lead to distrust, primarily since P2P Applications deal with money.
If you're still enthusiastic about venturing into P2P Payments Services, let us introduce you to how you can take your first step towards doing that.
Steps Involved In Development of a P2P Application Like Cash App
Choosing The Application Type
To start the process, you must define what kind of a service provider you'd be, whether you'd be a standalone application that deals with payments single handedly or partners with a bank/social media or any other institution.
The goals should be clearly defined with the intent, target audience, and services you'll offer.
Integrating Features and Technology Stack
The second step involves choosing between tech stacks and features you'd embed in your application.
Some common ones without which your P2P application would be incomplete are login features using secured OTP/ID, transaction history, forwarding invoices, loading money from an account onto the hot wallet, and vice versa (if your applications support that), two-factor authentication and much more.
Designing Simple Yet Intricate UI/UX
When it comes to financial matters, it's scarce to come across something that can be easily understood.
But that should not be the case with the user experience of your application. If it's also complex to use or understand, then all you'll see is a very high drop in retention rate and a declining growth curve.
So, the design should be simple yet effective enough to carry out all the financial transactions with much ease and understandability.
Setting Up Secured Connections
We've already talked about how important security is in handling payments. And thus, a security check becomes very much necessary in the development lifecycle of a P2P payments application.
The best approach to follow here is to go for internal and external testing so that you can tie leakage at both ends.
Beta Testing and Bug Fixing
Finding faults and fixing them in your applications using stages of testing such as Alpha and Beta testing is a must.
Getting The Paperwork Done and Deployment
The last step would be to file for legal compliances, get approvals, transfer all the rights to use the applications from the developer (if you're working with external development agencies), and deploy the applications into the real world.
If all this seems too much to handle on your own, then a simple solution would be to hire an App development company that can facilitate all this for you.
TechAhead has been in the mobile App development space for more than 13 years and has been a trusted choice for 650+ brands, including Fortune 500 companies such as Audi, AXA, Disney, and more.
As one of the Market Leaders as per the standards of Clutch Leaders Matrix in Multicultural App Developers Globally, TechAhead is more than capable of developing apps that can be introduced on a global scale.
Want to discuss the scope of your idea and see how we can pitch in and make it better? Well! Let's talk then.Click Here to Know More about Features that Drive Mobile Payment App Like PayPal