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P2P Payment Systems: History, Trends, and Backstage


9 min read

The convenience of peer-to-peer (P2P) payments has rendered traditional payment methods such as checks obsolete, with consumers preferring the simplicity of direct financial transfers. In the United States, a sizable section of the population has adopted peer-to-peer services such as PayPal, yet some still use traditional bank transfers, suggesting a generational difference in technological acceptance.

As of the end of 2023, nearly 50% of all transactions in the US were made through P2P services. Besides, the international P2P payment market is projected to grow up to $9 billion by 2030. No wonder including this payment method as an option when distributing your products or services is the way to enhance customer satisfaction and minimize the number of unclosed deals. 

In this post, you’ll discover what P2P is for a modern user, how P2P systems work, How to implement a P2P system in business, and what leading P2P platforms are there. 

What Is P2P For A Modern Internet User?

P2P stands for Peer-to-Peer, the type of payment service when a user sends funds directly to another user.

At the same time:

P2P system is a decentralized network architecture that allows members to connect directly without the use of a central authority or intermediary.

It is critical to recognize that the P2P system is not a specific type of payment processing but rather a collective term that refers to a variety of file-sharing networks, blockchain technologies, and payment systems.

In the context of digital payments, P2P refers to the direct movement of monies between persons or companies, which is usually enabled via a digital platform or app.

Major benefits that usage of peer to peer payments systems offers, compared to conventional payment processing systems, include:

  • Lower transaction fees
  • Faster payment processing
  • Enhanced convenience
  • Increased accessibility
  • Improved privacy
  • Reduced reliance on intermediaries
  • Greater flexibility in payment methods
  • Simplified international transactions

You can easily notice the difference in fees, convenience, accessibility, etc, between using a P2P app and conventional payment option when comparing, for example, PayPal to direct wire transfers, i.e., SWIFT payments. 

How P2P Payment Systems Work Behind The Scenes?

Let’s proceed with discovering the basic process revealing how the P2P payment system works in general:

  1. User registration: Users sign up for the P2P service by entering personal and financial information such as bank account or credit card information. It is possible to register via a mobile device application or a website. Businesses can provide an interface for consumers to use the P2P app through independent, non-banking applications. It’s done using banking APIs.
  2. Authentication: The P2P platform checks the user’s identification and financial details to avoid fraud and maintain security.
  3. Transaction initiation: When a user send payments, they provide the recipient’s information (for example, phone number, email address, or username) as well as the transfer amount.
  4. Payment processing: The peer to peer payments system processes the payment, which consists of numerous sub-steps: 1) Verifying the availability of money, 2) Securing the transaction with encryption and other security measures, and 3) initiating the transfer of funds from the sender’s account to the recipient’s account.
  5. Settlement: The payment is settled when the money are transferred from the sender’s to the recipient’s bank. Depending on the P2P service and banks involved, this may need the use of intermediary banks or payment networks.
  6. Notification: Both the sender and the receiver receive transaction notifications that the transaction has been completed (by SMS, email, or mobile banking app alerts).
  7. Reconciliation: The P2P platform updates both parties’ transaction records, ensuring that their account balances match the completed transfer.

Regarding any security concerns you may have, P2P transactions are as safe as any other type of online payment you may provide. It implies that while they are not immune to some cybersecurity dangers, financial institutions are required to follow HIPPA and GDPR regulations, as well as PSD2 and, in the future, PSD3 procedures, to ensure that the likelihood of financial fraud of any kind is minimal.

Partner with DashDevs to create your best online payment solution!

What Are the Leading Online P2P Payment Apps?

Now, let’s review three of the top examples of P2P payment platform providers, to understand what options are available on the market, what features are widespread, and what pricing policies are featured:


PayPal is a well-established online payment system that offers a wide range of financial services. It is known for its secure and convenient platform for online transactions. Payments offer a range of features tailored for businesses. It’s widely recognized and trusted, making it a reliable choice for B2B transactions. No wonder it had more than 400 million users worldwide as of 2023, meaning that a large portion of people with access to online payments have PayPal account. 

PayPal P2P payment platform features:

  • One-click payments and easy integration with e-commerce platforms.
  • Invoicing and recurring payment options for businesses.
  • Buyer and seller protection for secure transactions.
  • Credit management and access
  • Buy-now-pay-later options
  • Cryptocurrency transactions

PayPal pricing options:

  • Transactions are free when transferring money to friends and family within the same country and using a linked bank account or PayPal cash app balance.
  • For commercial transactions, there is a fee that typically includes a percentage of the transaction amount plus a fixed fee. The exact fee structure may vary depending on the country and the nature of the transaction.
  • International payments may incur additional fees, including currency conversion charges.


Stripe is a comprehensive payment processing platform designed for businesses of all sizes. It provides a wide range of tools and services for online and in-app payments, subscription billing, and financial management. Stripe is known for its flexibility, robust API, and seamless integration with various e-commerce platforms and business tools.

Stripe P2P payment platform features:

  • Supports a wide range of payment methods, including credit cards, ACH transfers, and digital wallets.
  • Customizable checkout experiences and invoicing options.
  • Advanced fraud detection and security features.

Stripe pricing options:

  • Pay-as-you-go pricing with a percentage of each transaction plus a fixed fee.
  • Additional fees for international payments, currency conversion, and advanced features.


Wise is a global money transfer service that focuses on providing fast, affordable, and transparent international payments. It offers a multi-currency account, allowing businesses and individuals to hold and convert over 50 currencies at the real exchange rate. Wise is known for its user-friendly interface and cost-effective solutions for cross-border transactions.

Wise P2P payment platform features:

  • Real exchange rates for currency conversion without hidden markups.
  • Multi-currency account for holding, managing, and sending funds in multiple currencies.
  • Batch payments and API integration for automating and streamlining business payments.

Wise pricing options:

  • Low, transparent fees for currency conversion and transfers, typically based on a percentage of the transaction amount.
  • No subscription or monthly fees, making it a cost-effective option for businesses with international payment needs.

Technology companies, even those not licensed bank providers, can have P2P payment platforms. Examples are Apple Pay Cash and Google Pay. So, it’s totally possible for a business to have a custom P2P platform, both open or closed, or have a P2P functionality integrated as a feature of their main product offering. 

You can request a software development firm to guide your choosing of a P2P provider as well as the entire implementation procedure. 

Step-by-Step Guide How to Implement a P2P Payment System

Should you decide to create a P2P payment system, you’ll need to undergo complex development processes. Considering that you won’t be obtaining a banking license or partnering with a bank and creating your own backend infrastructure to handle payment processing, implementation of a P2P system with a trusted fintech development partner will include the following steps:

#1 Define your objectives

Determine the purpose and scope of your P2P payment system. Consider factors such as:

  • Target users
  • Transaction types
  • Geographical coverage

These aspects will impact choosing of your provider of payment processor and gateway, 

#2 Research regulations and compliance

Understand the legal and regulatory requirements for P2P payments in your target markets. This includes anti-money laundering (AML) and know your customer (KYC) regulations. Besides, you are obligated to comply with HIPPA or GDPR customer data security standards, as failure to meet their requirements may result in penalties of up to 4% of annual revenue

You may be interested to read the DashDevs post on how to choose a KYC provider

#3 Choose a technology platform

Decide whether to build your P2P payment system from scratch or use an existing platform like one of the listed above. Consider factors such as:

  • Scalability
  • Security
  • Customization options
  • Pricing policy

#4 Set up payment processing

Choose a payment processor and gateway that supports P2P transactions. Ensure that it can handle multiple payment methods and currencies. Many payment processing infrastructure providers offer both payment processor and gateway services simultaneously, so most likely your provider chosen in the previous step will aid you in this matter.

You’ll probably find it useful to read the DashDevs post on payment processor vs payment gateway. 

#5 Front-end development: Design the user interface or customize the existing

Create a user-friendly interface that is intuitive and easy to navigate. Focus on simplifying the payment process and ensuring a seamless user experience. In case the choice provider offers a standard front-end environment for your users to utilize to conduct payments, you can simply integrate it and customize it.

#6 Back-end development: Connect your product to P2P platform via API

Probably your chosen provider will offer you a standard Application Programming Interface (API) to seamlessly connect your customer-facing environment with payment processing that lies at the provider’s back-end infrastructure. Alternatively, you will need to create your own API.

You can discover the most complete information on banking API from another blog post by DashDevs. 

#7 Test your ready P2P system

To test your P2P system, conduct a comprehensive assessment to identify and resolve any bugs or issues. The testing process should include:

  • Functional Testing
  • Security Testing
  • User Acceptance Testing (UAT)

Remember: customers are not willing to use a system that hardly works or doesn’t look reliable, so if they have an alternative option, they will definitely opt for it. Ensure that your product operates seamlessly. 

#8 Launch and monitor

Once your P2P payment system is fully tested and ready, launch it to your target users, which include these actions:

  • Deployment
  • Monitoring
  • Customer Support
  • Updates and Maintenance

Address issues and make improvements promptly. Always respect user feedback and strive to implement it if possible. 

The DashDevs team is ready, willing, and able to contribute to your best project

The payment niche now is diverse is extensive. Let’s distinguish 3 of the trends that are gaining traction now

#1 Unified Payment Systems

The fintech landscape is moving towards integrated payment platforms that merge the functions of merchants and financial service providers. This unified approach streamlines transactions, enhances efficiency, and improves the overall customer experience. Payment Initiation Services (PIS) facilitate this trend by allowing merchants to connect with customers through open banking and banking APIs, benefiting both businesses and consumers.

You can discover the classification of banking APIs from another blog post by DashDevs.

#2 P2P Payments for All Ages

P2P systems’ simplicity of use and convenience make them accessible to users of across different generations, from tech-savvy children to the elderly. As a result, peer-to-peer payment systems have overcome age restrictions, becoming a universal instrument for digital commerce. In this respect, companies must constantly remember that the payment options they provide in their digital goods should adapt to the tastes of and be available to practically all age groups, rather than a specific target demographic.

#3 AI and ML-Powered P2P Payments

Artificial intelligence and machine learning are changing peer-to-peer payments by allowing for quicker and more secure identity verification and account authentication. Furthermore, AI-driven solutions help to mitigate the risks connected with fraud and cyber threats. With continuing AI investment, the P2P transfer market has the potential for considerable innovation and development.

Final Take

P2P payment systems handle nearly half of financial transactions, offering convenience, speed, and accessibility that traditional methods cannot match. The shift towards direct, digital transfers is evident, with a significant portion of the US population embracing platforms like PayPal for their payment needs. As technology continues to evolve, person to person payments are expected to grow further, making them an essential feature for businesses aiming to enhance customer satisfaction and close more deals. 

Should you need assistance from a trusted fintech partner to implement a P2P payment system, don’t hesitate to contact DashDevs. With more than 12 years of experience and over 500 projects successfully completed, we can ensure prompt delivery and seamless work of your intended solution. 

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Table of contents
What is P2P payment?
A P2P (peer-to-peer) payment is a digital transaction that allows individuals to transfer funds directly to one another without the need for a financial intermediary, such as a bank, using mobile apps or online platforms.
What does P2P mean in banking?
In banking, P2P (peer-to-peer) refers to the direct transfer of funds between individuals' bank accounts or digital wallets, facilitated by online platforms or apps, without involving traditional banking intermediaries.
How the P2P payment process typically works?
The P2P money transfer process typically involves the sender initiating a payment through a P2P app or platform, entering the recipient's contact information, and confirming the amount. The funds are then directly transferred from the sender's to the recipient's account.
What is a P2P provider?
A P2P provider is a company or platform that offers peer-to-peer payment services, enabling individuals to send and receive money directly from one another without the need for traditional banking intermediaries.
What is the most popular P2P?
The most popular, among ones suitable for B2B business models, P2P payment platforms vary by region, but globally recognized ones include Wise, Stripe, and PayPal.