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What Are Peer-to-Peer Payments?
Peer-to-peer payment services let you use a bank account or a credit or debit card to pay friends or family from your phone.
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Peer-to-peer payments, or P2P payments, let you send money directly to another person. P2P payment systems — also known as money transfer apps, like Venmo, PayPal and Cash App — allow users to send and receive money from their mobile devices through a linked bank account or card
With P2P payments, users can quickly send funds while keeping their bank account details private. All that’s required to send a payment is the recipient’s email address or phone number; you can use one of those pieces of information to add someone as a contact within the app. Generally, these services are free and make splitting bills with friends and family painless.
Say you’re out to dinner with your cousin Charlie and want to split the check. Instead of fumbling around for bills and coins, Charlie pays using his card. You take out your phone and open your app of choice, pick Charlie from your contact list (or add him using his email or phone number), type the amount you want to send, and voilà — you've paid Charlie back. If you have a PIN set up, depending on the app you’re using, you’ll need to enter it to open the app or to complete the payment.
Once Charlie receives the money, he can leave it in his P2P account for the next time it’s his turn to pay, or he can transfer it to his bank account. Different services may have different steps or requirements, but most work something like this.
3.00%SoFi members with direct deposit can earn up to 3.00% annual percentage yield (APY) on savings balances (including Vaults) and 2.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 3.00% APY for savings and 2.50% APY for checking balances. Members without direct deposit will earn 1.20% APY on all account balances in checking and savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 11/3/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
3.00%3.00% APY (annual percentage yield) with $0 minimum balance to earn stated APY. Accounts must have a positive balance to remain open. APY valid as of 11/08/2022.
3.00%Advertised Online Savings Account APY is accurate as of 11/10/2022
Min. balance for APY
$0
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
3.20%Annual percentage yield (variable) is as of 11/07/2022.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
2.50%SoFi members with direct deposit can earn up to 3.00% annual percentage yield (APY) on savings balances (including Vaults) and 2.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 3.00% APY for savings and 2.50% APY for checking balances. Members without direct deposit will earn 1.20% APY on all account balances in checking and savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 11/3/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
1.25%Receive monthly direct deposits totaling $1,500 or more to earn 0.40% APY. Use your Axos Visa® Debit Card for a total of 10 transactions per month (min $3 per transaction) or sign up for Account Aggregation/Personal Finance Manager (PFM) in Online Banking to earn 0.30% APY. Maintain an average daily balance of $2,500 per month in an Axos Managed Portfolios Invest Account to earn 0.20% APY. Maintain an average daily balance of $2,500 per month in an Axos Self Directed Trading Invest Account to earn 0.20% APY. Use your Rewards Checking account to make your full monthly Axos consumer loan payment to earn 0.15% APY.
Monthly fee
$0
Money market accounts pay rates similar to savings accounts and have some checking features.
Money market accounts pay rates similar to savings accounts and have some checking features.
Choose a service that your friends and family already use. That will make exchanging money more convenient. There are plenty of P2P apps to choose from these days. Paying friends and family by phone or computer was first popularized by PayPal
. Google, Venmo (which is owned by PayPal) and others now offer similar services. P2P payments are also available through banks and credit unions, and on social media networks, including Facebook.
If you're the one choosing the payment service for your friends and family, check out a quick summary of our favorites below or read our more in-depth overview of top peer-to-peer payment apps.
. Review a provider’s security procedures and fraud policies before signing up, and take precautions when using P2P payment services, because once you’ve authorized a payment, you might not be able to get your money back. Banks and credit unions aren’t responsible for money lost from P2P scams.
Here’s what you can do to help P2P services keep your money safe:
1. Add a PIN or two
Many platforms let you create a PIN and require that you enter it to complete transactions. For even stronger protection, set up a PIN for unlocking your phone, too.
2. Opt for a notification for every transaction
Some platforms do this automatically, but if yours doesn’t, check your settings for the option to get an email or text anytime there’s a transaction on your account.
3. Pay and receive money only with people you know
Don’t pay strangers with P2P. Because you’re authorizing transactions yourself when you use a P2P payment service, banks and credit unions aren’t responsible for money sent as part of a scam.
4. Enter data carefully
If you mistype a recipient’s email address, phone number or name, the money could go to the wrong person. Double check your recipient’s information before you send a payment. Again, because you’re authorizing transactions yourself, banks and credit unions aren’t responsible for money you send to the wrong person.
How quickly do P2P payments post to the recipient's account?
Transaction notifications are sent right away, and you can immediately use the money you receive within a P2P app to send money to someone else within the app. But if you choose to transfer your money out of the app, those funds may take one to three business days to arrive in your linked bank account. Some providers are faster (funds from Zelle transfers are available in your bank account within minutes), and some also offer instant transfers for a fee.
What do P2P payments cost?
Generally speaking, you can make P2P payments from a linked bank account or straight from the P2P account for free. But some providers charge fees — 2% or 3% to process payments drawn from a credit or debit card, for example — for other payment methods.
“P2P” stands for peer-to-peer and means that you’re sending money directly to another person.
What is P2P payment?
A P2P payment is a payment you make directly to another person using a P2P payment service. With P2P payments, users can quickly send funds while keeping their account details private; all that’s required to send a payment is the recipient’s email address or phone number.
What does P2P mean?
“P2P” stands for peer-to-peer and means that you’re sending money directly to another person.
is a payment you make directly to another person using a P2P payment service.
With P2P payments, users can quickly send funds while keeping their account details private; all that’s required to send a payment is the recipient’s email address or phone number.
