P2P payment is also known as transferring money from card to card or peer to peer payment. It is a type of financial relationship between individuals on the Internet with no third party involved. Simply put, it is when a person transfers money to another person via a mobile banking app. According to the latest data, 62% of American young adults use P2P payments. They are now becoming so popular, you might hear people say “I’ll Venmo you,” or “I’ll PayPal you,” as a replacement of saying “I’ll transfer your money back”.
Let’s take a look at the example of P2P payments. Imagine the following: you and your friend headed to a restaurant. At the end of the dinner, the waiter came by and said that something went wrong with the POS terminal. As a result, you and your friend had no choice but to pay with cash. You didn’t have any so your friend paid for you. Then, you used your banking app to pay your friend back. That is the example of P2P payments.
P2P payments might imply fees. For example, if you are using the X bank and your friend uses the Y bank, you will have to pay a fee for a transfer. The fees vary according to your bank policies. However, if both you and your mate use X bank, the transactions are usually fee-free. International P2P payments always cost more than those that take place inside one country.