P2P Money Transfer – Do its Advantages surpass its Drawbacks?
Peer-to-Peer payment systems, also known as P2P payments or money transfer apps enable users to exchange funds from their smart devices through a connected bank account or credit/debit card. These apps make the process of bill splitting effortless among your friends and family.
The use of P2P money transfer apps is increasing each passing day as people pay less with cash and do more online payments. This growth has led many to search for the best P2P payment app that can address their needs irrespective of the devices they are using.
There are many P2P options in the market such as Apple Pay, Google Pay, Facebook Pay, PayPal, Zelle, Venmo, etc. that streamlines money exchange. But unfortunately, they become a breeding ground for fraudulent activities. From compromised accounts to hacking and scams, using P2P money transfer apps opens the door to some risks.
In this post, we will assess the advantages and drawbacks of P2P payments to discover whether their benefits override their hazards or not. So let’s get going.
P2P Money Transfer – Advantages
P2P payment apps and services are highly convenient and can be accessed from anywhere with smart devices. You can get your payroll funds in advance for up to two days. You can split your purchases among other users with a few clicks. You can send or receive funds in the comfort of your home.
#2. Real-Time Payments
You can make payments instantly with P2P payment apps. There is no need for someone to take cash out to pay you back and wait in a long queue for the check clearance process. Everything is fast, easy, and real-time.
#3. Contactless Transactions
There is no need to be physically present to make any payment transactions. It can be fully contactless. It is the most convenient approach especially in the global health crisis when social distance is necessary.
#4. Payment Notifications
P2P payment apps provide payment notifications that inform you about any transaction that has been made or is about to happen. It can prevent you from the wrong transaction. Many apps also have passcode locking options that restrict a payment that lacks your permission. Other best options are QR codes or dedicated links to share your deposit address without making any blunders.
#5. Bug Bounty
Whether it is Venmo, Zelle, Google Pay, PayPal, Apple Pay, Facebook Pay, or any other P2P payment app, each one offers cash rewards for people who can report any flaws or fragility on their app. It helps them to keep their app updated with all the latest security concerns.
#6. Low Fees
Third-party payment solutions usually cost fees that could be a percentage or flat fee of what you want to send. Many even cost a flat fee as well as a percentage, both. Making a safe payment with your online/mobile banking app avoids all the intermediaries as the transaction occurs directly between two users. So, the charges are low or are free.
P2P Money Transfer – Drawbacks
#1. Instant Payments
Transactions happen instantly with most P2P applications. It is not possible to cancel or change it once money is sent.
#2. Payment Reversal
You can not reverse your transaction if you make a payment to the wrong person by mistake. So it is necessary to check all the details twice before initiating any payment.
Hackers will often trick people into sending funds to them. You will still face uncertainty while sending large amounts of money across P2P payment applications.
#4. Increased Adoption
As more and more users are leveraging P2P apps, scammers are also becoming sharper to hack the systems.
#5. User Security
As many P2P apps comprise two-factor authentication for improved security, still many are there with only password verification.
It is easy to convert cryptocurrencies back to dollars, euros, or yen. But there is no assurance about the full retrieval of the original value of whatever transaction you have performed with the P2P currency.
Do the good things outweigh the bad ones?
Usually, any transaction that takes place between one person to another is pretty secure. The considerable risks with P2P payments are how users keep managing their apps and how they intend to use them.
We think the advantages surpass the drawbacks here. As long as users are careful with powerful authentication approaches and trust the person to whom transactions are initiated, it is easy to keep money and confidential information highly secure.
What’s next for P2P?
In today’s age, individuals are more likely to use their smartphones compared to cash and cards when it comes to payment or money exchange. Peer-to-Peer payment apps have turned out to be a feasible digital option for old-school payment approaches.
Now P2P payment app solutions are expanding their features and going beyond just person-to-person payments.
Zelle provides a disbursements feature as well as a solution for small-sized organizations. Venmo is focusing on merchant acceptance and broadening its branded debit card.
The upcoming phase of Peer-to-Peer may see these app solutions evolving as comprehensive fund exchange solutions that can be beneficial for consumers as well as enterprises.
Read more : Apple Pay vs. Google Pay – Comparison to Choose the Best One
It is for sure that the traditional payment method remains pretty secure. The money stored in a physical wallet is tangible, and there is no issue of any computational bugs or fraud here. But practically, it looks worse as it is difficult to count and collect the small coins in the wallet. You also need to carry your wallet with you all the time.
The virtual wallet in the smartphone addresses all the needs of the payer digitally. Just to avoid becoming a victim of fraudulent activities, follow a few simple rules and keep a few things in mind. Also, if something happens that increases your doubts- report it to the banking entities immediately.