P2P Payments

Peer-to-peer payments are payments that are made directly from one person to another via a website or app. In order to make a P2P payment, both the sender and the recipient of the funds need to be using the same digital wallet service (e.g. PayPal, Apple Pay, WeChat Pay etc.). Funds are transferred directly from one digital wallet account to the other.

Digital wallets are popular among consumers both to transfer money to friends and family and to make purchases. When transferring funds between users, the sender needs to know the recipient’s account details - typically the email address or phone number associated with the account. This is not necessary when making purchases from online retailers or using contactless mobile payments. On-site payments can be contactless, whereas in the case of a webshop, the merchant simply needs to set up their shop to accept the desired payment method. Consumers can select it from the list of available payments as for any other payment methods such as credit cards. IXOPAY supports a large number of digital wallet payment methods that can be used to make payments using popular P2P payment methods.

P2P payments are made either via an app or website. When transferring funds directly to a non-business entity, the payer typically needs to enter the amount and the payee’s email address or phone number to identify the recipient of the funds. When making purchases from a webshop, this information does not need to be entered by the consumer, as the webshop will be configured to determine the amount and recipient automatically. Some P2P payment methods also support NFC (near-field communication) to make payments.

In order to actually transfer funds, the consumer’s digital wallet either needs to be loaded with funds beforehand, or funds are taken directly from the payer’s bank account or charged to their credit card, depending on the payment instrument they have linked to their account.

The recipient of the funds can choose to have the amount paid out and deposited in their bank account, or use the funds in their digital wallet to make payments themselves.

In order to offer P2P payment methods such as PayPal or Google Pay at checkout, merchants need to sign up for a business account with the platform. The sign up process will include linking a bank account to the P2P account in order to be able to cash out payments received on the platform.

Once a merchant account has been set up, the payment method needs to be integrated into the merchant’s online checkout process or a suitable contactless payment method needs to be available in store.

How long it takes to receive a P2P payment depends on the platform, but can be as short as a few minutes when using funds already in the wallet. If the payer has linked their credit card to their digital wallet, the process is also generally fast, though in some cases, it can take around a day to process the transfer. If the funds need to be transferred from the consumer’s bank account, the process can take a few days, as the bank transfer itself is not immediate.