These payments, also known as P2P payments or money transfer apps, allow individuals to send one another money from their mobile devices through a linked bank account or card.

They make splitting transactions with friends and family, such as restaurant bills, easier.

For example, if the user is with a friend who agrees to pay, but splits the bill, they pay using their card or mobile phone app and the user opens their P2P app and selects their friend from their contact list. They type in the amount they want to send, and the money is sent to their friend’s P2P app. They can decide to leave the money in their P2P app to use next time or transfer it to their bank account.

There are some downsides:

  • Whilst the message is instant, the money isn’t and may take between one and three working days to reach the linked account if you choose to transfer it out of the app.
  • It may cost the user a processing fee for the transaction amount if your P2P service provider charges for the service if funds are taken from a credit or debit card.

Notable P2P services include: Venmo, PayPal, Cash App and Facebook.