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Wondering how to create an app like PayPal ?Or How to start a company like PayPal? Well you are at the right place. With this guide we will help you to understand the fundamentals of developing an online payment app like PayPal.
Online payment apps like PayPal have taken the world by storm for quite some time now. Furthermore, with the advancement in the tech world the online payment app market is flourishing more than ever before.
Before jumping straight into the process of how to create an app like PayPal let us have a quick look at some of these numbers.
Statistics of Digital Payments Industry
According to a report by Statista, the total transaction value in the Digital Payments segment is predicted to reach 1,272,816 million USD in 2021. Furthermore, according to the same report, the total transaction value is predicted to show an annual growth rate (CAGR 2021-2025) of 13.31%. It will result in an expected total amount of 2,098,515 million USD by 2025.
These numbers clearly depict the vastness of the online payment market. Henceforth, there is a high demand in the market for digital payment platforms. Thus, to meet with this high demand, many business giants are constantly working to bring out their own online payment platforms.
Also Read: Why Coronavirus has made Digital Transactions necessary?
Today there is a plethora of online payment platforms available for both Android and iOS devices. PayPal, GooglePay, etc are some of the most popular online payment platforms. There are plenty of reasons that make these online payment apps extremely popular among the masses.
One being that they are extremely secure and reliable to carry out transactions Furthermore, these apps offer a long trail of services to their customers. Today people can pay for their bills, transfer money to their friends and family and even receive money with just a few taps on their screen using these online payment apps.
Let us learn a bit more about online payment apps like PayPal in the next segment of our blog.
Everything You Need to Know About PayPal
Before learning about how to create an app like PayPal it is extremely crucial to learn more about this online payment platform and the features it offers.
- Founded by Max Levchin, Peter Thiel, and Luke Nosek in December 1998 as Confinity, PayPal is one of the most sought-after online payment platforms. Furthermore, today PayPal is operating in over more than 200 market sectors across the globe.
- As of now, PayPal has over 377 million active users. Furthermore, PayPal is enabling its customers and merchants to receive funds in over more than 100 different currencies.
- In addition to this, PayPal account holders can withdraw their funds in 56 currencies, while they have the ability to hold funds with PayPal in 25 currencies. As of 2021, PayPal has an estimated net worth of more than 45 billion USD.
Let us learn a bit more about all the wonderful features that it has to offer us.
A Look into the Features of Online Payment App Like PayPal
PayPal offers following features to its customers around the world.
- One of the most remarkable features of PayPal is that it can work as both a personal payment gateway and as a merchant payment gateway for e-commerce stores. Thus, one can make the best use of it according to their needs.
- Another advantage of using PayPal is that it offers the functionality of peer-to-peer payment transactions. Furthermore, one can link their credit cards, debit cards and bank accounts directly on PayPal to conduct hassle-free transactions.
- Talking about the security and reliability of the online payment app PayPal, it has one of the most rigid and robust security features. Advanced fraud detection and screening, end to end encryption, address screening, etc all these features makes it exceptionally safe and secure to use.
- PayPal adds easily to all the point of sale functionalities and all kinds of services use PayPal for online payments and personal payments.
- Furthermore, PayPal operates under strict regulations of the financial services industry and has a stringent ‘Know Your Customer’ process.
To sum it all, PayPal offers great services such as quick payment processing, excellent data security that too for reasonable processing fee. All these features make it a robust online payment platform.
How to create an app like PayPal? – Step by Step Explanation
How to create an app like PayPal? Well developing an app irrespective of its niche is a tedious process. There are so many intricate details that one must take care while working on developing an app.
To make this process more skimmable and easier to understand we have divided it into simpler steps. With every step we will learn about one different aspect of the payment app development.
So let us begin with how to create an app like PayPal!
STEP 1. Defining the Scope of the Project
When working on developing an app it is extremely crucial to define the scope of the project. Project scoping includes various crucial factors including-
- Working on developing a web app, an Android app, and an iOS app to meet the demand of all customers.
- The payment app developed must have the following attributes and features-
- Must have fundamental online payment features like opening user and business accounts, conduct online payment, transaction/balance reporting, etc.;
- Robust ID verification and KYC process for the users and merchants to protect from any scams and frauds.
- Customer Resource Management features to keep a check on the relationship with merchants and vendors.
STEP 2. Choosing the suitable SDLC model for your Payment App
Similar to project scoping, selecting the correct SDLC model is very important for your app. Furthermore, launching a Minimum Viable Product (MVP) with all the attributes will become more beneficial for your app.
Since you will focus on one geographic location thus you can get the true market feedback for your app. Consequently, it will help you to further improve your app to many folds.
Step 3. Plan a Robust Development Approach
Step number 3 of how to create an app like PayPal advises the users to devise a systematic development approach. However, there are many ways one can plan their development approach.
- One can use ‘ Platform as a service’ and ‘Mobile backend as a service’ to devise their development approach for their web and mobile app respectively.
- Furthermore, it is highly advisable that your app has features such as Push notifications, robust CRM, ID verification process, integrated Application Programming Interface (APIs), SDKs, etc
Step 4. Hire a Core Team of Developers, UI/UX Designers, Marketers, etc
Once you are done with planning everything out, the next step is to build a scrum team for the actual development process of your payment app.
Your team must consist of following experts-
- Web developers, with Node.js expertise
- Android developers, with expertise in Kotlin
- iOS developers, with Swift skill
- Testers
- Project manager
- Business Analyst
- UI/UX Designers
All these experts work together to build a robust online payment app like PayPal.
Also Read: How many people does it take to create a successful mobile application?
One must be wondering if it would be a tedious process to find all these experts together at one place. Well, your search for the best app development company ends here with Idea Usher. Our team consists of top business analysts, project managers, app developers, designers and marketers. We will cater to all your needs that too without costing you a fortune! Isn’t it a steal deal!
STEP 6. Get an Online Payment Solution for your Payment App
Using API/SDK is a great idea to implement an online payment solution to your payment app. One of the best examples is Braintree by PayPal itself. It provides a solid online payment solution namely- Braintree Direct with a comprehensive list of features.
Some of the best features of Braintree Direct includes-
- It enables your app to accept and process online payments. Furthermore it is compatible with web, Android and iOS devices.
- Braintree offers rigid security solutions which makes the apps very safe and secure to use.
- The comprehensive range of integration options available with Braintree Direct makes it extremely smooth to use on other platforms and applications like billing, analytics, etc.
STEP 7. Obtain an ID Verification Solution
A robust ID verification solution is extremely important for a payment app to keep it safe from any scam and fraud. Furthermore, the ID verification solution must comply with the strict rules and regulations laid down by the financial service institutions.
Similarly, the ID verification solution must have the feature to handle the Know your Customer (KYC) process. Furthermore, it should handle the government ID that the customer will provide during the verification process.
STEP 8. Develop the Application
The step on how to create an app like PayPal is to develop the application. Now this step deals with the actual coding and development of the app. You can choose to outsource the application development process or build it inhouse.
However, we always recommend outsourcing the development process. To know more about outsourcing an app and building it inhouse check out our blog- 10 Reasons Why You Should Outsource.
STEP 9. Test the Application
Once the app development process finishes it is extremely important to test your app before launching it. Rigid testing of the app ensures that it is free of any bugs and other issues. Furthermore, it will help you to identify and rectify any issues before publishing the app.
Regular and Rigid testing will help you to make your app better than its competitors. It will enhance the performance of your app by many folds. Thus, helping you to increase its ROI and earn more profits from it.
How Do Online Payment Apps like PayPal Make Money? – A Look into their Business Model
Let us talk about the business model of PayPal and how it makes money in this segment of our blog.
The PayPal business model is a classic example of a two-sided and fintech platform.
Since, at one end of the spectrum are the merchants and vendors that use the services of PayPal. They use these services to carry out fund transactions securely. Similarly, at the other end we have individuals, consumers and the users who initiate payments through this digital payment platform, inside these merchant websites.
Key Components of PayPal Business Model
The business model of PayPal consists of various key components. All these key components play a major role in the functionality of the PayPal app. Let us quickly understand all these components.
- Customer/ Consumer Segments
- Customer Relationships
- Channels
- Key Resources
- Value Proposition
- Key Partners
- Key Activities
- Cost Structure
- Revenue Streams
Back in time it was extremely difficult to send and receive money overseas. However, PayPal was successful in eliminating this age-old problem. It enabled people to carry out transactions overseas without any hassle. Furthermore, its service was way cheaper and quicker than most of the banks and financial institutions back then.
This feature became a strong reason for its growing popularity among the several others. Thus its revenue and net worth increased substantially over the time. However, there is no single way by which PayPal makes money.
There are a number of ways by which PayPal makes money. Let us have a look at some of these ways.
Transaction fees
Transaction fee is the most fundamental and basic way by which PayPal makes money. So every time a user sends or receives any money, PayPal charges them a fee according to the country.
So the transaction fee varies from country to country. Furthermore, the fee is calculated on the amount of money you sent via your debit card, credit card or through PayPal credit.
This transaction fee is different for merchants and businesses. All the business accounts that vendors use to receive payments from their customers have to pay a fee of 2.9% on the amount they receive.
Furthermore, they have to pay 0.30 USD per transaction.
International payments
When one receives payments from different countries, PayPal charges them a fee that includes the currency conversion costs. Also the international payment fee varies according to the currency.
Business accounts
PayPal offers Pro-Business accounts that have some added features and some special resources for the users. However, PayPal charges its users a fee of 30 USD per month for this added feature.
Withdrawal fees
It is extremely easy to receive money via a custom link on PayPal. However, when you want to withdraw that money, PayPal will charge you a withdrawal fee. This fee varies from one country to another country. However, in the USA, the fee is 2.9% of the total amount one receives in addition to a base fare of $0.30.
Furthermore, PayPal also charges a fee for each time you withdraw money with your debit card.
Interests
The money which is kept in PayPal is deposited in liquid investments that provide interests as a source of revenue to the company.
Payflow
Merchant accounts can add Payflow as a gateway into their merchant websites. Additionally, via a free plan, customers enter the payment details on a page that is hosted by PayPal.
In addition to this, there is a premium option too. The premium option costs 25 USD per month. Using this premium plan the user can design their own checkout page according to their needs.
Furthermore, PayPal charges $0.10 for all the payments initiated via credit cards. It also offers various other features such as advanced fraud protection, buyer authentication, screening, etc.
Working capital
One can borrow up to 15% of the last 12 months of sales (up to $85,000). Furthermore, there are no interests and the fee is fixed, and the payments are made as a percentage of PayPal sales. The larger the percentage, the lower the fee.
Business in a box
In the close association with Xero and WooCommerce, PayPal offers some solutions. With this the company earns a substantial affiliate commission on that.
Credit Interest
If someone uses a credit of $99 or more, which is paid fully within six months then you do not need to pay for it. However, for all the other conditions the annual percentage rate is 19.99%. This percentage rate is calculated from the date of posting.
So these were some of the ways by which PayPal earns money. One must carefully understand that all the successful business giants irrespective of their niche have more than one source of income.
Same is the case with PayPal. PayPal has figured out a number of ways by which it earns its revenue. Thus, if you are someone willing to create an app like PayPal then you must form a similar but better business model in order to thrive in this competitive online payment app market.
Coming to our business of how to create an app like PayPal, let us finally dig into the fundamentals of creating an app like PayPal. In this next segment of our blog we have talked about everything you need to know about the development of a payment app like PayPal.
So without waiting any further let us get started with it.
How Idea Usher can Help you to Build a Robust Payment App like PayPal
Online payment app development solutions are in huge demand due to the widespread digital economy. They are creating a roar in the market due to their hassle-free and convenient services.
If you are someone who is thinking of developing an advanced and scalable Payment App like PayPal, then you happen to be at the right place. Idea Usher is a leading software and app development company that designs web and mobile based solutions for you.
From design to development, we have got you covered! Our team of the best developers and experts will guide you through each and every step of app development be it designing or the marketing of your app. We will cater to all your needs and requirements to produce the best customized solutions.
Furthermore, we use cutting-edge technologies such as Artificial Intelligence, Blockchain Development, Machine Learning, and complement them with human-centric UI/UX design to offer solutions that are futuristic and result-driven.
Our services are not just limited to just designing and developing your app. We offer our services post your app’s launch too- like support and maintenance. Furthermore, we will help you to form effective PR strategies to boost up your app’s performance in the market. And also, getting more app downloads.
What are you waiting for then? Contact us today to get your dream pharmacy app project started! Also, do not forget to check out our portfolio and the comprehensive list of services we offer to our clients across the globe.
Wrapping Up
We hope you like our blog – How to create an app like PayPal? To conclude, building an online payment app like PayPal is a daunting process which requires rich expertise. However with the advancement in the tech world it is becoming one of the most popular app development niches.
Investing in building a payment app solution is extremely profitable keeping in mind the high demand of digital payment solutions.
However, there are new online payment apps in the market everyday. One must observe closely the marketplace data to find out the new trends in the industry. It is extremely important that one is keeping a check on its competitors to create a successful and profitable payment app.
