As technology changes and cash is becoming less and less common, knowing how to use person to person payment methods on your phone or computer can make money transfer much simpler.
In this post we will learn about the different person to person payment methods, and explain some differences between them.
These methods use apps or websites that allow for the input of credit card, debit card, or bank info in order to send money back and forth through them.
In order to use them you need to either download the app for your phone or tablet, or go to their website.
There you will create an account and add payment send/receive information.
These often allow for transactions that don’t allow the other user to see their banking information. This makes them more secure and accessible. In fact, some apps don’t even show the vendor your information.
Peer to Peer apps
Two examples of p2p apps are Venmo and Cash App. Each one of these is designed with the intention of sending and receiving money quickly and easily.
These apps allow for you to do this for free for personal transactions. They only charge a fee for goods and services, and business transactions.
Once a payment is received it will be held in your wallet on the app. You can use these apps to pay other people, or with online vendors that accept these payment methods.
If you want to take it your cash out of the apps wallet, you will need to link your bank account to the app first.
You will then have the option for an instant transfer for a fee, or a standard transfer for free. This generally takes two to three days.
Some apps, like Cash App, also have some Crypto integration as well.
Since Venmo is a frontrunner in the US of these p2p apps, see our blog post, How to set up a Venmo account and make a payment, for more in depth information on how to use it.
Online Payments and business integration
Though similar to the options above, some services, such as Paypal, offer a better platform for online payments and business integration. You will often find this as a payment method when checking out on most retail websites.
Paypal is also a front runner when it comes to international use.
Though it is primarily used for business transactions, it can also be used to pay other people through a PayPal account, the same way you do with Venmo or Cash App.
Similar to Venmo, there are fees depending on the Payment type. Paypal may have fees depending on how the account is set up and the method of paying and receiving that is being used. Here is a summary of PayPal Fees.
Wallet Integrations
Some apps that allow for sending money from person to person, also have wallet integration features that allow for some cool functionality when shopping in stores or online.
Two of the most common of these are the Apple Pay/Wallet and Google Pay/Wallet. These are so common because they are integrated to each respective companies phones. With Apple it comes on all iPhones. With Google it comes with all Androids.
These apps allow you to add payment methods to a digital wallet, such as a credit card, debit card, or bank account. You can then use them to send money to others for free through each of their respective avenues.
Where these differ is they offer special functionalities that the others do not. These allow you to do things like:
- Tap pay anywhere the method is accepted.
- Pay quickly in apps that use it through biometrics such as your face id, touch id, or phones pin/passkey.
- Add Concert, Sports, or any event tickets that allow it.
- Hold digital versions of Passports and IDs if the country is accepted.
Bank and Zelle
Some banks offer direct transfers, usually within their own bank, as well as transfers using Zelle.
Go directly to the bank’s website to see if they use a service other than Zelle.
Any questions about transactions are usually handled directly through the bank.
Information about setting up a Zelle account is here and depends on the specific bank.
Comparisons
The method that is best for you will depend on a number of factors, including the accounts that you have, the accounts that the other person has and the type of transaction that you wish to make.
Since all of these major examples can send money from person to person. It is the other slight differences and compatibility with other people that may determine which one you mainly want to use. Below is a chart to help comparing them head to head.
NerdWallet has a good article explaining some of the differences between these various vendors.
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