How to Create Legally Compliant Peer-to-Peer Payment App

Updated 06 Jan 2023
Published 23 Jan 2021
Rahul Mathur 2600 Views
peer to peer payment app

Money plays an integral part in our lives and affects how we live, relate, and see the world around us. The problem with money is that it is not easy to maintain, carry, and use in its conventional form.

If you have gold or silver, you cannot use them for exceedingly small transactions like getting a pack of noodles or paying for the metro ride. If you carry cash, you cannot carry too much of it if you need to pay for larger transactions. Both forms also have the added risk of being stolen or getting lost.

eWallet app development

Bank accounts provide the convenience to store your money safely, but checks are passé, and net banking requires a stable & secure internet connection.

Credit and debit cards always carry the risk of being cloned and may carry a high transaction fee to boot. But as a pattern, you can see that we moved from gold to coins, then from currency notes to checks, and again from wire transfers to cards. It has always been a journey in search of more safety and convenience. 

Every form of money, physical, fiat, or digital, is a step towards the same goal. Electronic wallets, eWallets, or peer-to-peer payment apps provide the ultimate form of security, storage, and convenience. A peer-to-peer payments app presents the user with an omnichannel payment solution to replace their physical wallets, multiple cards, and the need to access their bank accounts.

With the ewallet app development space opening up, many opportunities have opened up for entrepreneurs. P2P-payment apps can engage better with their customers, make transaction processing smooth, and add value using innovative features like spend analysis and financial investments.

Innovations in P2P-payments apps include bill reminders & payments, overseas or inland remittances, splitting bills among friends, and making regular investments. Like any financial tool or instrument, a peer-to-peer payments app must be robust, secure, and legally compliant, and above all, it helps users in cashless transactions.

Because of the reasons listed above, and many more not listed here, P2P payments app development is gaining currency, and if you are one of the few innovators who plan to launch one, then the professional team at Arka Softwares has got your back.

What is a Peer-to-Peer Payment App?

A P2P payment app, or an e-wallet app, permits its users to make transactions with any other user who has the same app installed. The other party can be their family members, friends, clients or service providers, employees, local shops, food stalls, small or large businesses, or any other third party.

Users can make payments to the other party using various payment gateways– using their registered mobile number, scanning a unique QR code, or manually entering their bank account details. These apps are secure and follow the strictest rules applicable in the jurisdiction, laid down by the federal banks and federal governments.

Secondly, most good P2P payment apps are robust, meaning they can work with an unstable network or with a sudden spike in simultaneous logins and transactions. It is essential as users have entrusted their hard-earned money and would not tolerate losing a single penny due to some system glitch.

Finally, a P2P-payments app or an e-wallet is built to provide convenience to their users. The convenience of splitting bills with friends, receiving reminders for recharges or utility payments, making payments for eCommerce transactions, paying for services, transferring money, and even investing in specified securities.

Users can do all this anywhere – while in bed, on the go, at the office, or even scheduling recurring payments. They can do it any time, late at night, on weekends or vacations, or at the eleventh hour to avoid paying penalties.

electronic wallet

An electronic wallet mimics your physical wallet, in the sense that you add money to it using your internet banking account, credit or debit cards, or other ewallets. Money gets added to your ewallets when you receive payments from someone or receive a cashback from the app or the merchant.

You can spend the amount that is present in your wallet at any given time, no more than that. If the transaction amount is more considerable than the wallet balance, you can add money to the go using any of the methods mentioned above and continue the payment.

How do Ewallet App works?

  • Electronic wallets facilitate monetary transactions in a secure environment with reliability. Users use the simple features of these P2P payment apps to pay bills, recharge, and do online shopping.
  • The Peer-to-peer payments app has multiple pieces of software running different devices and servers to create an ecosystem for payment. The mobile app of a P2P-payments wallet is downloaded and installed by the users.
  • Users have to complete a one-time registration by linking their mobile number, bank account, or card with the wallet to make and receive payments. This registration is also necessary to fill your wallet with cash for future payments.
  • All users who wish to make or receive payments must have the same client app installed on their smartphones.
  • The merchants who wish to use this app to receive payments must install the app’s merchant version. This app has more features than the user app and can be used to see transaction history and maintain a daily cash register.
  • The server is usually installed on a public or a private cloud, providing a secure and reliable service to all users through their apps. It provides services related to adding bank accounts, linking cards, and making & receiving payments via secure APIs.
  • Additionally, the ewallet software is available in the form of a secured desktop application or web application. Usually, users prefer the mobile app, but the other two can be useful for the elderly and people with disabilities.

eWallet apps work

  • The app, web application, or desktop applications have menus and icons to reach various functionalities. Properly placed menus and easy navigation make it easy for users to find the option to make or receive payments scan QR codes check transactions and order history check bank balance pay for recharges, utility bills, or online shopping, and even checkout at the POS at a mall.

P2P Payment Apps – Market Size and Statistics

According to a report, the global P2P payment market was worth USD 1.89 trillion in 2021 and is expected to be worth around USD 9.87 trillion by 2030, growing at a CAGR of 20.16% from 2022 to 2030.

P2P Payment App Market Report

The same report cites that the global transaction value for P2P-payments apps would see a more significant jump than the number of users. The total global value of transitions was more than USD 4.9 trillion in 2020 and is projected to cross USD 8.18 trillion by 2024, a CAGR of 13.74%.

According to Zelle, a bank-baked payments app company, almost 69% of Generation X smartphone users and 51% of smartphone users among the baby boomers use P2P-payments apps.

Why are electronic wallets apps successful?

There are many popular electronic wallets worldwide – some are popular only in the country of their origin, and some others have an international presence. For example, PayPal, Apple Pay, Google Pay, Venmo, mPesa, Square Cash, etc.

All have international operations spanning multiple countries. Whereas, AliPay, PayTM, Freecharge, PhonePe, etc., are popular mainly in China and India (for the last three).

Whether their operations are limited to a country or are international, these P2P-payments apps have shown consistent and tremendous growth.

The most important reason for these apps’ success is their unwavering focus on the security, reliability, and convenience that they offer and ensure a world-class infrastructure and software design.

Users can switch from one payment app to another at minimal to negligible costs, making the needs of the users, the primary concerns of the apps.

Though it may seem that the market is saturated for a new P2P-payments app, there is always room for creating new markets, exploring innovative ideas, and gaining a decent share in the increasing pie of the P2P-payments app business.

p2p-payments app

The interoperability of apps – one ewallet can send/receive money from another ewallet by a different company – has left the field open for new innovative products to disrupt established players’ operations.

That is why many unrelated players – from Uber in cab-hailing to food delivery apps like DoorDash, or from business wallet to Apple Pay – are all vying for a share in the growing pie. The e-wallet app operator would gain control over the users’ spending data that can be later monetized in many ways.

Benefits for Users of P2P payments Apps

  1. The convenience of making payments – anywhere, anytime, any amount, to anyone
  2. Security and safety of money and transactions
  3. Robust infrastructure and app design ensure their money is safe
  4. Innovative features like bill splitting, payments reminders, spend analysis, online investments, and many more
  5. Multiple ways to make payments – mobile number, bank transfer, and card payments.

Benefits for Operators of P2P payments Apps

  1. The chances of users using the main app are greater if they are using the P2P-payments features.
  2. Spend analysis can help the business to suggest related and better products, leading to cross-selling and upselling.
  3. The user data can be monetized in different ways by sending them targeted advertisements or charging subscriptions to keep their experience ad-free.
  4. With more transactions happening on a platform, the probability of them growing in value and volume increases exponentially. You can get a more significant market share.
  5. You can host exclusive products or movie launches online and sells the product for tickets in flash sales. More launches mean more users, which in turn means more premiers and so on.

Types of Mobile Ewallet Apps

P2P-payment apps can be categorized based on their services and the openness of the systems. Let us understand what they are and what are the different types of ewallets or P2P-payments apps in each of them.

Based on Services:

Bank-Centric Apps:

Many banks have launched their peer-to-peer payment apps to allow their customers to use mobile payment services. Sometimes, instead of launching their separate ewallets, banks partner with an established ewallet player in the market and provide exclusive benefits for their customers.

Bank-centric P2P payments app has the advantage that any transactions are seamlessly integrated with their core banking solution.

Standalone Services:

Standalone P2P-payments apps build their separate mechanisms from banks and facilitate money transfers from all banks that support them. Users can link their bank accounts from any bank with their electronic wallets and start using them.

Social media-centric:

Seeing the growth in payment apps and the opportunity for monetization, many social media companies such as Facebook, WhatsApp, Snapchat, and Google have recently launched their payment apps. These apps are again standalone but provide seamless payment services for in-app purchases for games and other services.

Based on Openness

Closed eWallets:

A closed app is used by a company dealing in fast-moving products and services to let its customers make payments at any of its stores or outlets via these eWallets.

The loyalty benefits and cashback by the company and cash top-ups by the user are all credited to the account in the electronic wallet. Similarly, cancellations and refunds are also credited to the wallet. Closed wallets cannot be used for money transfers, cash withdrawals, or investments.

Semi-Closed e-wallets:

When the issuer company has tied up with many partners across different segments and users can make payments at any of them, they use a semi-closed eWallet.

Compared to a closed eWallet, their applicability and acceptance are more extensive and dynamic. Usually, smaller merchants with fewer outlets enter into agreements with larger merchants who have issued their eWallets. Like closed wallets, they cannot be used for money transfers, cash withdrawals, or investments in financial instruments.

Open eWallets:

Banks, financial institutions (like credit card companies), telecom, or social media companies issue eWallets with acceptance at all merchants and no restrictions. Users of open eWallets use them for any category of transactions, including money transfers, cash withdrawals, or investments in financial securities.

Industries that can benefit from P2P App Development

P2P-payments apps have become popular very quickly. The simplest reason to understand this is their widespread use and acceptance. Many businesses and other agencies, including schools and healthcare centers, have started accepting P2P payments.

Users can make payments for any facility or product from the convenience of their home or office. It is also convenient for them when it comes to instant money transfers and keeping a transaction trail.

mobile app development company

Ecommerce and Retail:

E-Commerce is the immediate and most significant beneficiary of ewallets as payments through them are quick, secure, and efficient.

Many retailers and eCommerce portals host flash sales for the exclusive launch of products. Making payments through their integrated apps is the fastest and means that ewallet users have a better chance of getting those products. Many offline retailers have now started accepting and even issuing payments through ewallets. Users get a detailed billing for future use.

Food and Grocery Delivery:

The COVID-19 stay-at-home restrictions and pandemic scare made people shop for groceries and food online or using grocery delivery or food delivery apps. Many stores either tied up with existing peer-to-peer payment apps or started their own to provide contactless payments. Using these apps, one can make donations, tips, and contributions to their close causes.

Food and Grocery delivery

On-demand Cab and Transport Services:

Public and shared transportation services like ride-sharing, cab-hailing, and Metro services accept electronic money transfers via ewallets. Many cab-hailing companies have started their branded P2P-payments apps that can be used to pay for rides and much more.

Online Bills & Recharges:

Telecom companies can be the biggest beneficiaries of the P2P-payments app, as their users frequently pay bills and do recharge their mobile, DTH, OTT, and utility services. Money transfer, credit card payments and recharges for others are also easily possible.

Key Features of an Ewallet App:

  • Registration and log in using a mobile number with verification using OTP.
  • User profile, transaction history, and repeat order features.
  • Add money to their eWallet from multiple sources.
  • Send money to other users of eWallet by typing the phone number or scanning QR codes.
  • Pay utility bills like electricity, broadband, gas, water, rent, and building maintenance.
  • Recharge smartphone connections, DTH, metro cards, pre-paid electric meters, and broadband.
  • Pay school fees, insurance, and loan EMIs.
  • Book tickets for trains, theaters, movies, buses, and flights (both national and international).
  • Use eWallets to make faster payments and quick checkout on the website or eCommerce app like noon.
  • Receive money from others, get credits for coupon codes, gift card offers, and super deals with cashback.

General Features of an E-wallet App

User Panel

  • User Registration, login, and forget/change password.
  • Link one or more bank accounts.
  • Adding money to the eWallet.
  • Fund transfer & receipt.
  • eWallet passbook.
  • Transactions history and spend analysis.
  • Offers, deals, and cashback are offered.
  • Electricity and other utility bill payments.
  • Book tickets for Bus, Train, or Flight.
  • Reviews & ratings.
  • Friend referral.
  • Select the preferred language.

Admin Panel

  • User and role management.
  • P2P payments app wallet management.
  • Making digital payments module,
  • Issue Coupon codes offers & cashback module
  • Customer support & feedback module

Advanced Features of an E-wallet App

  • The merchant partners would get digital receipts daily.
  • Push notifications to remind users of the arrival of products or services.
  • Geo-location for nearby offers.
  • Bookings calendar and a joint Loyalty program.
  • QR code scanning.
  • Cloud-based server operations.
  • Integration with Wearable or smartwatches.

Things you need to consider when starting your Ewallet App


Security is one of the most critical concerns among users, banks, and the government. Spending for better security with each passing day is, for quite some time, are the best bet and insurance in these markets. When you develop a peer-to-peer payment app like Quadpay, security issues can be provided with:

  1. Strong Access control list
  2. Continuous testing of the network for leakage and backdoors.
  3. Updated companies’ security policies
  4. Regular vulnerability assessment audits and their management.

International Currency Support:

If your P2P-payments app would be an international app, getting a real-time conversion rate between multiple currencies is difficult. To avoid these restrictions, many international sellers receive their payments in USD or EUR only.

Comply with PCI-DSS and GDPR:

All P2P-payments apps must comply with PCI DSS to operate in the USA market and ensure that rules of GDPR are being honored here.


If there is a dispute between two users or one user and one merchant, the company must make the product more exclusive regarding the sale of a product. Disputes may arise due to failed money transfers, cashback claims, and cancellation of bookings. In any case, the regulatory framework must be robust.

Regulatory Compliance:

As cash is a federal government subject controlled by the central bank, it is heavily regulated. With these two’s involvement, we can say that the market space for digital payments space using eWallets is heavily regulated.

You need to comply with all norms needed stipulated for P2P payments apps and systems. The challenge increases as each jurisdiction have a different set of rules.

Cost of Electronic Wallet Development

The significant determinants of the cost of creating a mobile P2P-payments App are:

App Design:

The users would give a great app with superb functionality a pass if their interface is improper. So, today they can focus on the best view and user experience. A good UX plays a vital role in speaking the truth with the attention of users.

ewallet app


Each platform has its unique features and benefits, and the cost of designing the app. Generally, the development team may be handling all sorts of design issues, and some features are applicable to using drugs.

App Features:

The number of features you want support for in the app would decide the amount of effort and person-hours to be billed. It would have a direct bearing on the cost you may have just met.

App Development Team & Effort:

The professional and experienced team at Arka Softwares provides a dedicated product/project manager to your project to guide you through the entire journey with us while directing the engineers’ team to fulfill your expectations.

The team would comprise well-trained and experienced UI/UX engineers with exposure to the latest design principles development engineers with Android, or iOS, Windows, Linux, and macOS backgrounds testers and quality assurance engineers cloud-based backend system integrators, and API engineers.

It would take eight weeks or forty days to build a P2P-payments app for Android smartphones in the most conservative estimate. It is assuming 8-hour workdays. Therefore, it would be an estimated 320 person-hours with efforts from the product/project manager, UI/UX engineers, native app developers, system integrators, and testers.

Country of Development Minimum Hourly Rate Cost of Development for 320 Hours Cost of Development

(In Approx. USD)

New Zealand NZD 140/Hr. NZD 44,800 USD 54,900 
Europe EUR 100/Hr. EUR 32,000 USD 39,200 
USA USD 120/Hr. USD 38,400 USD 38,400
Australia AUD 140/Hr. AUD 44,800 USD 34,100 
India INR 3,750/Hr. INR 1,200,000 USD 16,500

The approximate cost of USD 16 to 20 thousand is the cost of developing peer-to-peer payments app for your business.

The cost would include the setup and deployment of the cloud-based payments server, a merchant app for shopkeepers, third-party API integration, and a web-based dashboard for management. However, these costs do not include the costs for license fees or the purchase of any third-party APIs or tools that you may need.

We have presented the most competitive and realistic estimates for an Android Peer-to-peer payments app for smartphone users. The estimates for an app for iPhone users would be anywhere ten to fifteen percent marked up, as the tools for iOS are costlier.

Suppose you want a complete or a near-complete solution with Android, iOS, Web applications, and Desktop applications (Windows, Mac, or Linux). In that case, we can customize the package for your individual needs.


P2P payment apps or eWallets make things look very simple, more than the actual complexity behind the scenes. The complexity and challenging features of any electronic payment app look deceptively simple. Users need convenience and safety above all, with added benefits of reliability, cashback, and having to be somewhere.

With too many changes in the digital financial space, any app that brings all these features with an innovative idea is bound to succeed in the long run on technological and financial levels.

Rahul Mathur

Rahul Mathur is the founder and managing director of ARKA Softwares, a company renowned for its outstanding mobile app development and web development solutions. Delivering high-end modern solutions all over the globe, Rahul takes pleasure in sharing his experiences and views on the latest technological trends.

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