How to create a payment app

Mobile wallets and payment apps are exquisitely transforming the way we make payments. We are already storming our way through to a cashless, contactless, and real-time payments world. Users can now travel and shop almost anywhere in the world – without any cash, and without a card too! Provided, you just have the magical device with you, a smartphone. 

Isn’t it magical? (Indeed magic we literally cannot live without in the modern world.

Well, let Idea Usher experts walk you through a brief insight about how to create a payment app or how to create your own payment gateway. We dive into payment gateways, costs, and features of payment app development.

What is the meaning of payment app/gateway development for P2P payment apps?

payment gateway development 

Imagine you went out to buy groceries and end up with a shortage of cash in your wallet!

Now we all know many grocery stores do not accept card swipe payments. This leads to a very awkward situation and the feeling of removing stuff from your cart is something we should always avoid. 

A P2P (person-to-person or, peer to peer) mobile payment app is a service that we utilize to perform electronic transactions. We can pay anyone having the same or a similar payment gateway configured. 

P2P money transfer apps have some standard highlights:

  • They are developed for personal use between users who know each other well – hence less transaction protection is required than commercial platforms
  • Funding requirements vary across different P2P payment apps (bank account, debit/credit card, dedicated in-app account).

Suppose in the same scenario, you happen to have a mobile wallet configured. Followingly, you can just pay the shopkeeper via the payment gateway app! It is wonderful how efficiently we can solve problems using technology. 

What are Peer to Peer (P2P) payment apps?

Peer-to-peer payment apps are also referred to as P2P payments or money transfer apps. Some famous examples of the same include Venmo, PayPal, and Cash App. A P2P payment app allows users to perform transactions through an app payment gateway. The users can pay each other through their linked bank accounts and cards. These payment gateway apps facilitate splitting bills with friends and family effortlessly.

Let’s discuss in detail how P2P payment apps work, how to create a payment app, and how much the development of a payment gateway costs.

P2P payment gateway app development

Although it is easy to develop a P2P payment gateway application, such a real-time app payment requires enough standardization and security. There is a standard protocol to follow when one is to build a mobile payment gateway. Moreover, a P2P app has to be trustable enough to be accepted by people worldwide for transactions.


P2P payment gateways must, at all costs, prevent potential frauds and any trust issues.

The transaction volumes on popular P2P payment apps are growing exponentially. Hence, establishing users’ trust for apps is crucial for their success.

The 5 types of P2P payment apps: Business model of an easy to use a payment gateway

payment gateway development

1. Standalone Payment App

It’s quite interesting to know about real quick transactions offered by standalone payment apps. Additionally, these standalone payment gateways have an offline wallet allowing users to add money before offloading it. The leading players of this service are PayPal and Venmo (with PayPal topping). PayPal is so far accessible in over 200 countries. Other standalone payment gateway platforms established by app developers in the USA include Airfox and Square cash.

2. Foreign Exchange Payment App

Suppose you want to send currency overseas, and that too instantly. If you’ve got a smartphone or tablet in your hand, you can do that with minimal charges as compared to banks. Platforms like Wise (ex-TransferWise) are doing phenomenally well in this domain.

3. Social Media-Centric Payment App

You just minimized your Facebook/Instagram before reading through this, right? Ahh, that ain’t guessing; we all are equally addicted to social media. In recent years we have witnessed many social media giants launching P2P payment apps. In 2019-20, Whatsapp (by Facebook) launched its payment feature where users can transfer funds within the app. 

Additionally, Snapchat also kickstarted Snapcash four months before Facebook integrated the payment feature into its messenger. However, Snapchat had to shut it down on 30th August 2018.

4. P2P Lending Apps

These apps provide users with microloans/wallet credits with interest rates lower than the banks in the USA. They are very beneficial to users in emergency situations.

5. Bank-Centric Payment Apps

Bank-centric payment apps are P2P apps payment gateways with a bank as one of the acting parties. These apps can be divided into two categories:

  • One where the bank provides a mobile payment application. Some well-known bank-centric P2P payment gateways include Clear Change, Popmoney, and Zelle.
  • Second is the partnership of third-party payment applications with selected banks. In this category, all the transactions are ensured by the app organization and the bank isn’t directly responsible.

How to create a payment app: key development steps

Development steps for payment app

Choose the P2P app type

Priorly, you need to select the type of your P2P payment app. We now already know that standalone and banking app gateways are the most preferred types. So you have to decide your choice among:

  • Standalone
  • Bank centric
  • Social Media centric
  • Foreign Exchange

Prioritize mobile platform

You should do this if your budget is limited. Initially, you can start with one mobile platform – iOS or Android. Further, a bit later you can order the development of another app version for the other platform.

Plan the important features for a P2P payment app

Apart from MVP features a P2P payment gateway cannot function effectively without, you can add extra functionalities that your platform needs to be unique. Moreover, everything depends on your requirements. Some essential features for every P2P payment app are:

  • Signup/Login
  • Passcode/ fingerprint authentication
  • Notifications
  • Unique ID and OTP verification
  • Digital wallet
  • Sending bills and invoices
  • Sending and receiving money
  • Transaction history
  • Messaging

Fix the security and legal issues

This step is especially vital in a fintech startup. You need to keep up with all security issues to secure the app and make it trustworthy for users. This helpful article will also describe to you how to secure data from cyber attacks.

Now, P2P payments app being a fintech one has certain legalities attached to it. So unless you satisfy the rules and legal bounds, you can not just develop and launch your own payments gateway/app.

Every country has its own regulatory laws for P2P apps. The Asian sector is at the very forefront with its regulatory standards for payment apps. On the other hand, the US has its own sets of laws when it comes to P2P apps. Without satisfying these rules and regulations, there is no way you can launch and start the operations of your app in the market. 

4 ways you can secure your payment apps for the users. 

  1. App Security: Unique security lock features, with Touch ID and face recognition, can help the users to make their app secure. This way when their phone is stolen, the app’s security can’t be compromised right away.
  2. Two-factor authentication: It will save users from fraud and major hacks. With just passwords, it is going to be easier for the hackers to hack into the system, but when the password tech is combined with another unique authentication process, it is a lot harder to break into the system.
  3. Instant notifications: App users should be notified instantly whenever a transaction happens, or money is deducted from or added to their account.
  4. Follow the regulations: Check PCI DSS regulatory standards. These payment gateway data security standards have been laid by the big players like VISA, Mastercard, American Express, JCB internationals, etc.

Moreover, no one wants to risk their financial credentials through a payment app. Money is highly important for everyone in life. Hence, ensure that your own payment gateway is secure and safe.

Choose the tech stack

Even though selecting the right tech stack relies on the app’s type (native/web/hybrid). Now since your payment app should be a native app, the concerned developers can use the mentioned tech stack.

  • For iOS – Swift/Obj C, Apple XCode/Intellij Appcode [Tool]
  • For Android – Java, Android Studio/Eclipse [Tool]
  • Notifications – Chrome notifications, Rest APIs, Amazon SNS, APNS, and Firebase cloud messaging.
  • Unique ID and OTP verificationBamboo invoice, Rest APIs
  • Digital wallet – Rest APIs
  • Sending bills and invoices: 3rd party SDKs like: Firebase, Twilio, Nexmo, Digimiles
  • Sending and receiving moneyDwolla, ACH
  • Biometric authentication – Optical fingerprint, Capacitive sensors

Pick the nature of the P2P app

Primarily, there are 3 kinds of apps: Native, Hybrid, and Web apps.

Native app: A native app is a smartphone application specifically developed for a mobile operating system. The best example is Facebook. It looks identical on iOS and Android, but if you take a constant look, you’ll find the dissimilarities.

Web Apps: They are server-based apps accessible in a browser via the internet across any platform. 

Hybrid: These are primarily web apps wrapped in a native design. Example: Gmail. It catches the interface of the current operating system. Unlike Native apps, they are not designed separately for each.

Yours being a payment gateway app should ideally be native by design. Additionally, native apps are preferred more in the digital world. Users find native apps more convenient to navigate through than anything else. Moreover, it offers a better UI/UX.

Choose the revenue model

Ever thought:

How does Paypal make money? 

What is the revenue generation strategy for a P2P payment app?

Let’s find answers to these everlasting questions

Behind every successful business, there’s a fabulous revenue model. 

After all, it’s nothing but profit that sparks a startup for further development. An efficient revenue model ensures a decent annual profit and smooth capital rolling. Undoubtedly, without the business model, all ideas, efforts, and innovative features would be useless. The startup won’t even sustain for long, if for the absence of profit. The capital structure of any app is crucial in gearing its success. It helps an entrepreneur drive their business in the right direction. 

There are primarily two methods from which you can select any one or go for both of them:

A. Premium Service Method

Allow all your users to access the native features like fund transfers, transaction history, etc. Here comes the important thing, you should only allow the premium users to use high-end features. Those can be a chatbot, cryptocurrency transactions, chatting, currency trends, and conversion features, etc.

B. Advertising Method

You can call for fintech firms or banks to advertise their products on your app page. Moreover, your app has to provide dedicated spaces for ads. When the user clicks on one, it will generate revenue. This is referred to as the pay per click method. It is a widely used earning technique. You can use it too.

How to create a payment app/gateway like Venmo or PayPal? 

how to create an app like Paypal

Ensure that your app allows all the major online payment methods

In order to respond to all your client’s requirements, your mobile payment gateway should support the following online modes of payment:

  • Online eCommerce payments
  • On-the-spot payments at retailers
  • P2P payments within the system’s network

However, simply accepting the above payment modes is unlikely to give you uniqueness. In order to raise your target audience’s attention in your app, you should also look for incorporating possible use cases the above payment modes can be associated with. 

These additional features may well promote your app at a very good level:

  • Paying a seller on an installment (EMI) plan.
  • Paying for a taxi service. 
  • Sending and receiving a P2P borrowing request.
  • Allowing a certain amount as a borrowing limit to a friend or a family member, such as your kids. (This functionality could be super attractive to parents.)

Apart from all of these, you should provide quality customer support for your users.

2. Don’t expose the user’s credit card details

All financial transactions need security and safety. Now, when you are creating a mobile payment app/payment gateway, people are giving you their credit card details. Your users trust you the most, quite literally. Therefore, you should understand that the security and safety of users’ personal financial data is the topmost priority. Moreover, your payment app layout should be smooth, safe and secure. 

Additionally, suppose while paying at outlets, the users of your mobile payment app may use the app very openly to make transactions. You should ensure that your app does not expose users’ credit/debit card details and credentials to the surroundings during a transaction. Design your app to send protected code instead. Incorporating fingerprint authentication and PIN authentication, is a must to perform such transactions.

  • Data encryption
  • Two-factor authentication
  • PCI-DSS and other regulations compliance

3. Prevent System overloading

You have to understand that your app will never receive overnight success. It is a slow and gradual process. It depends on your app, the quality, marketing strategies and much more. The number of users will increase steadily but not at once. So you need to prepare according to that. Especially, the load on the app needs to be calculated regularly and you need to make decisions based on that.

Someday, this load might turn out to be excessive and cause disruption, or simply disrupt your app’s availability. You have to avoid the overloading of your system. For this, there’s only one simple solution; allow the increase in volume capacity of the system as per the increase in number of users.

4. Execute separate synchronization of financial data

Now, each transaction in your payment system causes a continuous reaction. There will be thousands and millions of recalculations at a given moment if you get to a high number of users. Here’s where the optimization principle comes in. You should separate the data from the transaction operations

Your entire system should not be concerned with all the transactions happening at a time. An ideal approach will be zeroing down on threads for different transactions. But, that requires huge processing power. Let’s try to understand if we can have another strategy behind this.

5. Move ahead with the most optimal development technology

The primary focus of any mobile payment gateway/payment app should be dealing with eCommerce sites ideally. There is a direct connection to the scaling of your app with the rate of online shopping by users. 

The absolutely important features of a mobile payments application are:

  • Notifications
  • Unique ID and OTP verification
  • Digital wallet
  • Sending bills and invoices
  • Sending and receiving money
  • Transaction history
  • Messaging

Each of these features is a basic requirement to enhance the user experience of paying. Additionally, users should not be made to wait even a second more than usual. Payment apps/payment gateways which take little more time to process transactions are abandoned by the users extensively. 

Note: Generally, Native apps are able to load online shopping apps 1.5x faster than other apps do. You should consider this while selecting the technology for your payment app development.

9 key features of a secure payment gateway interface 

To build an app that facilitates P2P payments, the mobile app payment gateway must include few critical features which would make their app a sure success. These features are vital to sustaining the stiff competition of the market.

Sending and Receiving money

Everything is simple – users should have the capability to send money or request the required amount from other users. You can also provide users with the option of setting up recurring payments.


This feature is very effective as it notifies the user whenever a payment is initiated or received.

Moreover, it notifies for every wallet activity. In addition to that, P2P payment apps have extended their services to send notifications for bill due dates and ticket bookings.

Send the bill, invoice

Invoice should be generated for every transaction that happens in the app. Both the payment sender and receiver should be provided with an invoice, which can be further used as proof of the transaction. 

Additionally, users should be allowed to share the invoice of payment sent directly via the mobile app.

Transaction history

The app must have a feature that allows the users to see the summary of all their past transactions made via the P2P payment gateways.

Unique ID/ OTP

Every mobile finance solution must send a unique ID or OTP (One-time password) so that the user can verify it before any amount gets deducted from its wallet or account.

Additionally, to increase the security for payment apps, some P2P mobile payment platforms ask for OTP(One time password), each time the user makes a payment.

Transfer amount to the bank

Generally, users like it if the P2P payment app provides them the flexibility to transfer the money from the app to the bank account.

Every Mobile Payments app has a different revenue model attached to this feature. The transfer to the bank requires a certain amount of transfer fee.

Fingerprint security lock

  • P2P payment apps are highly prone to risks as they contain important bank account details and credentials.
  • Due to which it becomes imperative for a developer to provide foolproof security to its app user.
  • You can secure your app by incorporating a fingerprint security lock in the app. Additionally, this feature will ensure authorized access to only the individual users of the app.


Sometimes, for borrowing from or lending money to a friend, we need to have a conversation. P2P apps with the facility of chatting are more successful and highly preferred over those without the feature.


Peer-to-peer payment solutions must have a chatbot that can address all the queries that may arise while transacting funds, wrong deductions from account/wallet, and in the case when the user loses the internet connection

Idea Usher: best online payment apps/gateway solutions developer

We hope that now you are well aware of the working of P2P payment apps, and how to create a payment app. Currently, we are witnessing rapid digitization and a sparkling fintech trend in the market. Therefore, you shouldn’t leave this chance to go ahead with developing a money transfer app, but you might need some help with that. 

At Idea Usher, we have a team of skilled developers, highly experienced to deliver lucrative solutions in the market. Their years of hands-on industry exposure ensure quality service within the desired schedule.

Our team assists in each aspect of your business and keeps you updated with the process. Have a P2P payment app idea in mind? Do not hesitate to connect with our expert team to kickstart your business.

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