Remember when sending money meant writing a check, making a trip to the bank, or waiting a few days for a transfer to clear? Well, maybe you don’t, but the point stands: for years, that was how it went. The development of financial technology—fintech—changed that.
Now a fintech product development company can make it as easy as tapping a few buttons on your smartphone. Companies like Kindgeek changed the rules by revolutionising Peer-to-Peer payments—also known as P2P.
In recent years, Fintech apps have made P2P payments fast, easy, and convenient. But what are P2P payments? Why are they so popular? And how do Fintech apps change the game? Let’s dive into this topic and find out the answers.
What Are Peer-to-Peer Payments?
To put it simply, P2P is a way of payment where you pay another person directly using an app, for example. No need to involve cash or checks, not even to visit a bank. You just use the app that is designed for this sort of thing and has a connection to your bank account, and you can send money to another person in minutes.
So P2P payments work through apps that link your bank account or debit card to the platform. With the help of an application, the money is transferred from your account to the account of the recipient quickly, safely, and easily. A win for everyone involved.
The Benefits of Fintech Apps for Peer-to-Peer Payments
There are a lot of huge benefits to love fintech apps for making P2P payments as accessible and simple as they are. Here are a few of the key reasons why it has become as popular as it is:
- Speed.
With traditional banks, the money transfers can take days to process. However, in the case of a fintech app, the transfer can be processed in literal seconds. You send money to your friends—they receive it in just a few moments. Neat!
- Convenience.
Fintech applications made by companies like Kindgeek can transfer money anywhere, at any time. Want to split the bill for lunch or pay back a friend for something? Take care of it right from your phone. There’s no need to run to the bank or have cash on hand, which is why a lot of people prefer this method.
- Lower fees.
You are typically not charged to send or receive money on apps made by fintech product development companies. Some of them might require small fees for certain types of transactions: a transaction with a credit card, for example. But the cost is still significantly less than the typical bank transfer would be.
- Accessibility.
Another great thing about the fintech apps is that most of them allow you to transfer funds across borders. Whether you need to pay a friend or a family member, sending money their way through international transfers is easier than ever with apps made by companies like Kindgeek.
How Fintech Apps Have Changed the P2P Payments
Fintech apps have indeed revolutionised the way we approach P2P payments. For example, fintech apps are exactly that—apps! They are designed and optimized for a smartphone user by fintech product development agencies. They allow their users to manage all processes anywhere and at any moment. Whether you drink your latte in a coffee shop or ride on a bus, you can transfer money on the go.
Some money-related fintech applications began to introduce a social element into their payments. Now you can add a note or an emoji while sending a payment, or even share it with your friends. Not the money and financial details, but just the action itself. It’s a fun way to exchange money.
Security is a serious matter for fintech applications, too. From encryption to two-factor authentication, even biometric logins are in place to keep your money safe. That means your transactions are secure even with online access.
Have you ever tried splitting expenses? Of course, you have—that’s the reason fintech apps are designed to help you with that. Most of the apps today come with features that allow you to split your payments within a group. That makes the whole procedure hassle-free.
Challenges and Risks of P2P Payments
While P2P payments are super convenient, they come with certain risks—just like with any technology, especially the one that has online access.
As much as fintech applications are secure, there is always a risk of scams or fraud. You should be very careful when you send money to people whom you don’t know or whom you can’t exactly trust. If your payment is sent to another person by mistake, it may be very difficult to recover the money.
Another point is that governments are still working out how to regulate P2P payments. While fintech apps have grown in leaps and bounds, rules and laws are catching up. This can result in confusion, particularly in terms of taxes or international payments. Not to mention that those types of payments might have much higher fees and conversion rates to keep in mind.
The Future of P2P Payments in Fintech
Some fintech apps are already starting to involve blockchain technology in making P2P features even faster, more secure, and more accessible. Another point of this tech is of course, cryptocurrencies. While already on the rise in popularity, it may become even more common in the future.
With fintech apps becoming increasingly ‘smarter’, we can expect even more integrated features. Take artificial intelligence, for example, it can automatically make or suggest payments based on your spending habits from previously collected data.
Fintech products also have a huge potential to breach geographical borders—legally, of course—in the ways that traditional banking systems just couldn’t. Or they could, but that would involve a lot of resources spent, which does not always lead to great results. Fintech P2P payments can help find a solution that will be beneficial to everyone involved.
Conclusion
Fintech applications changed the way people deal with money in P2P operations. It became much easier to send or receive money than it ever was before. And with new rapidly developing technology like blockchain and AI, this area is going to keep getting better and better.
