P2P payment simply means person to person payments. It is an online banking system that allows customers to make transactions from one person’s account to another. P2P payments can also be done through credit cards to other individuals account for easy and fast transaction.
P2P payment has become a common and popular trend in the global world due to its accessibility and easy process. Unlike going to banks, queuing, filling tellers, P2p takes less time. However, this also takes time before the money gets to the second party.
How does P2P Payment works?
There are two terms generally known as the approaches to initiates a person to person payment that is p.payment which includes the successful PayPal approach and the other one is the online interface or mobile application.
Here, users establish a secure account with the third party online service. Next is to ensure their credit card or bank account details is available for funds transfer, including the third party app or website. The transaction is completed either by sending or receiving money. People using this are commonly known by their Gmail or email address, and usually through this system can send money to individuals who are also members of the network.
Online Interface or Mobile App of P2P Payment
Following the first approach is the use of online interface or mobile application of p.payment by customers. This is developed by the bank to know the actual amount to be transferred into the other party’s account. The recipient is known by their email address or phone number and once the sender has done the transfer, the recipient must receive a notification to make use of the online interface by inputting his or her bank details. Including his or her routing number in order to accept the transfer funds. In this process or methods, therefore, the receiver does not necessarily need to have an account with the financial institution before any transaction could get to the individual.
Why P2P Payment Matters
One of the importance of P.payment is that; due to the acceptance of online banking, e-commerce, and mobile banking by customers, person to person payments are fast and efficient.
After several years of PayPal taking dominating the markets, credit card companies and most banks are now into the system and this trend has been in existence in different parts of the world. This is a very crucial step for credit card companies, and banks inclusive as commerce circulates beyond the individual to business people or merchants relationship to broad parts. Also the exchange from individual to individual to a larger extent.
Also, P.payment matters due to its flexibility and less stress of procedures but mostly for android users phone before it could be done. Where this is not available, then it could be very difficult to be done.
Also, P.payment matters because it can be done anywhere at any time in any place of the world so the network is available, it’s very easy to access. Distance doesn’t matter in terms of online banking, credit card transfer and so on.
Advantages of using P2P Payment
There are several advantages of using p.payment which has benefitted many companies, banks and other sectors in different parts of the world. There are also several disadvantages to be aware too which will be listed and explained below for better understanding. Principal among these advantages includes the followings;
- Convenience: online p2p payment or credit cards are quicker and could be more cheap to use than cheques. It is very useful for day to day activities spending or expenses and as well be used on the internet or mobile phones.
- payment also pave ways to monitor expenses; Individual minimizes the rate of his or her expenses when is not with cash.. rather than having it with you.. also one can set different credit limits for each card. Due to this, one can manage his or financial spending.
- Also, p.payment are mostly recognized; using p.payments for international or foreign purchases enhance greater exchange rates thereby facilitating international trade around the globe.
Disadvantages of P2P Payment
No matter how one uses maximum spending limits on workers, rest assured that you are giving the employees access to spend companies unaware or unchecked.
- payment Card fraud– in a situation where the card details are been known or discovered by anybody, you may find fraudulent been purchased showing negligence, therefore one business will be liable for the payments which might seem difficult to do. In this case, therefore, card details should be kept secured to avoid being revealed.
- payment Debt is also one of the disadvantages in the system; the time range between the purchase and the payment, this is tempted by oneself thereby bringing up debts for the business which could bring down the business into a loss in one way or the other. It should be equally be noted that if one makes a purchase with a credit card and don’t pay off in full payment, it will require interest charges for the delay been caused.