Peer-to-Peer Payment Tools

Peer-to-Peer Payment Tools

When it comes to settling a bill for services rendered, paying a babysitter, splitting a lunch bill with someone or sending money to the other side of the U.S., you have many person-to-person or peer-to-peer (P2P) payment services to help you make that digital transaction.

What are Peer-to-Peer Payments?

P2P payments are simple-to-use, secure phone apps that allow you to send payments to other people through a linked debit card using your mobile device. They enable you to send money to your friend in a restaurant across the table, anywhere in the country or even in another country.

Most apps are free and quicker than trying to write a check or find the right combination of bills. You also have a record of each transaction you make, regardless if it is for gas, rent or the dinner tab.

Many of these apps are not always the safest payment method for retail purchases and are more intended for peer-to-peer exchanges from one friend to another.

Popular and Safe P2P Payment Apps

Some different P2P payment apps include:

  • Zelle
  • Venmo
  • Cash App
  • PayPal
  • Google Pay
  • Apple Pay Cash
  • Facebook Messenger
  • Skype

When using P2P payments, there are some things to take into consideration. For instance, you may experience delays. Even though transaction notifications are sent and received immediately, it could take up to three business days for transaction approval, and the funds appear in your account. However, this depends on the P2P service you are using.

You may have to pay fees. Some services charge a small amount to process a payment for a debit or credit card — usually only a few cents for each transaction. Again, it depends on the P2P service. Be sure you read the fee policy carefully.

Making Secure Payments

Paypal popularized payments between friends and family using a computer or phone. Now, Venmo, Google, and many others offer the same functionality. Credit unions and banks offer this service now and even social media networks like Snapchat and Facebook.

So, when you are at a restaurant having dinner and you want to split the check with a friend, you just:

  • Take out your phone
  • Open the payment app
  • Select your friends name from your contact list
  • Tap the amount you wish to send
  • Enter your pin

That is all there is to it. Your friend receives a notification through their app that they have received money. Once they get the money, they can either transfer it to his bank or keep it in his P2P account to use at another time.

The P2P app works kind of like a go-between. You link your card, and it enables these types of transactions. However, there are different requirements and different steps with various services.

Things to Consider in Selecting a Tool

Whether you are still deciding if a P2P service is right for you or you are already using one, there are specific features you want to look for handing out your financial information.


You want to make sure that the service protects personal information like your credit card or bank account information. Therefore, search for P2P apps that require more than a single authentication method to verify your transactions or identity while logging in.

Transaction Limits

Some P2P apps impose limits on transactions that might prohibit you from using the app to transfer large sums of money. Smaller amounts like paying a dinner tab probably won't be impacted, but if you are looking to move more substantial funds, you will want to check and see how much you can transfer.


Many P2P services charge a small percentage of your transaction if you make money transfers using your credit card. If you are using your bank account or debit card to make the transfer, many services do not impose a fee, but with credit cards they do. You also may want to see if there are additional costs for sending money internationally.

Speed and Accessibility

Some P2P providers may take up to six days to clear the transaction. Others may do it inside of a day or less. Then there are bank or credit union providers that provide real-time transfers if you are a customer of that bank.

It can be quite convenient being able to transfer money using your phone. However, like anything else involving technology, you need to research to find a secure and reliable service. A little research on the different features each service has to offer and reading each company’s terms and conditions can help you make a better decision when choosing the right P2P payment service for your needs.