
Top Business Models of P2P Payment App
CIO Review APAC | Friday, April 23, 2021

FREMONT, CA : Mobile payment applications are undergoing a rapid transition towards a cashless, card-free, one-click purchasing, and pay-contactless world. The applications can streamline and optimize activities like splitting bills, money transfers, travel booking, and managing expenses.
Fintech is restructuring the ways people manage their money by providing mobile wallet applications, m-commerce apps, blockchain networks, peer-to-peer payment apps, and many more. Card-less, cashless, and bank-less peer-to-peer payment applications will be the next generation of peer-to-peer payment apps.
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What is a peer-to-peer payment app, anyway?
People can consider the Western Union (which existed long before mobile) or PayPal. A peer-to-peer (also known as person-to-person, or P2P) mobile payment system is an app that allows people to send money to a friend, family, contractor, or employee.
P2P money transfer apps have few standard features. They are developed for personal use between people who know each other well, due to which it has a lower level of transaction security compared to the commercial apps. The transaction times can range from a few minutes to several days, based on the method used for transactions.
Three business models of P2P payment applications
Companies interested in developing a mobile peer-to-peer payment app will come across three different types of solutions:
Bank-centric solutions
Many banks provide customers with mobile payment apps or devices that ensure retailers have the required point-of-sale (POS) acceptance abilities. Rather than using a stored currency account, these applications are drawn from and deposit directly into bank accounts. A mobile network operator's job is to ensure the quality of service (QoS).
Standalone financial services
After introducing the Financial Services Action Plan in Lisbon in 2000, independent service providers (ISPs) could mediate officially. They accept online and in-person P2P/C2B payments with or without checking accounts and debit or credit cards. These apps usually have a wallet feature that allows users to store money before depositing it into a bank account or sending it to a peer.
Mobile OS or device manufacturers
Money transfers are only permitted within their product ecosystem. Here, 'Pay' is more of a built-in device feature than an app. This model works best in developed countries with established payment infrastructure and consumers who are comfortable using it. For added safety and convenience, the services use card tokenization and device-based thumbprint authentication.
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