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Peer-to-peer (P2P) payment apps let you transfer money to friends and family in just a few taps, making them one of the most popular ways to exchange money. But while these apps are convenient, they aren't all the same.
Understanding how P2P payment apps work, what they cost, and the security features they offer can help you choose the right one and avoid costly mistakes.
Peer-to-peer (P2P) payment apps let you send and receive money from friends and family members using your bank account, debit card, or a balance you carry on the app.
P2P payment apps make it easy to split bills, share costs, or reimburse purchases. For example, if you share a phone plan with family members, you can use a P2P app to pay your portion of the bill by sending money to the family member who manages the account. And you can do so without using cash or writing a check.
Common examples of P2P payment apps include:
P2P payment apps typically require downloading the app and creating an account. Then, you generally have to link a bank account, debit card, or credit card to start transacting.
Often, the person you're paying must have an account on the same P2P payment app. For example, if you want to send money to your friend via Venmo, they must have a Venmo account to receive the money. To find a payee on a P2P app, you can usually search by name, phone number, or email address.
Depending on the platform, you may be able to carry a balance in the app for future use; alternatively, you can transfer it to your linked account. Some apps, such as Zelle, send money directly to your bank account.
For many P2P apps, standard transfers are free and may take up to three business days. Often, you can pay a fee to make an instant transfer.
There's no shortage of options when it comes to P2P payment apps. Here's an overview of some popular choices:
Venmo lets you request or send money to friends, family, or local businesses from a linked bank account, credit card, or your Venmo balance. To pay someone or request payment, you can look up their profile in the app by searching their username or scanning their personal QR code.
While standard transfers are typically free, there's a 1.75% fee for instant transfers.
In addition to paying with the app, Venmo offers a debit card you can use to spend the money in your Venmo account while earning up to 5% cash back.
Pay family, friends, and local businesses