If you’ve ever needed to pay someone back for a coffee or for splitting a meal, you might be familiar with peer-to-peer (P2P) payment services.

P2P payments are transactions between two parties with separate bank accounts. A P2P service mediates these transactions by allowing consumers to send money to another person’s bank account through a third-party website or mobile app. Many consumers use P2P services, but you might still be wondering how they work and whether they’re safe.

How P2P payments work

When an account holder signs up for a P2P payment service, they need to connect a personal bank account to the service — typically through an online portal or mobile app. Different products have different rules for what kind of accounts can be linked to the P2P service. Some may allow customers to link a savings account to deduct payments from, for example, while others don’t. Other users of the service can find and send money to your P2P account by searching your username, email or phone number.

Users can directly transfer money from their linked accounts to another user’s P2P account who is signed up with the same provider. In some cases, when a user receives money, it’s automatically deposited into a linked bank account, but several products require a secondary step to transfer funds from the app to the linked bank account. The amount of time it takes for money to transfer into a bank account can vary between different P2P accounts and may take from a few seconds to several business days.

Who offers P2P payments?

There are many P2P services on the market, but here are some of the most popular ones.


Zelle users can directly transfer money between one another. Users simply search the email or phone number of another Zelle user and can then send money directly to their bank account, typically within a few minutes. Unlike some other P2P products, Zelle can be accessed directly from many banking apps. Most of the big banks are partnered with Zelle and automatically provide the service to customers, including TD Bank, Bank of America, Truist, Capital One, Chase Bank, PNC Bank, U.S. Bank and Wells Fargo.


Similar to Zelle, Popmoney allows users to send and receive money from their contacts. Payments can be made from a debit card or straight from a bank account. With a debit card, the money is delivered by the next business day, while from a bank account, the transfer may take up to three business days. Those who have accounts at banks within the Popmoney network can access the service through their online bank account. Big banks within the network include TD Bank, Bank of America, Citibank, Ally Bank, U.S. Bank, Fifth Third Bank and PNC Bank.


Paypal is a global P2P service, meaning that users can send and receive money internationally. Paypal offers a service called Xoom that comes with a user’s Paypal account and converts foreign currency. There is no fee for sending money from a Paypal account or bank account, but the service does charge 2.9 percent plus a fixed fee on domestic and 5 percent on international payments made from a linked card. Users also have the option to make instant transfers from their Paypal to their bank accounts for a fee, or else they may make a standard transfer for free, which takes one to three business days. Paypal’s services can be accessed on its desktop site or mobile app. It is not affiliated with any specific bank, but any bank account can be linked to a Paypal account.


Venmo is a popular, mobile P2P service owned by Paypal. The services it offers are similar to Paypal, but it can’t be used for international transactions and money can only be sent through a mobile app. Venmo allows instant transfers to a bank account for a 1.5 percent fee, or users can make a free, standard transfer that takes one to three business days. With Venmo, users can also send requests to other users with a memo, such as a request for a shared utility bill.

Cash App

Cash App is another mobile P2P service, available in the U.S and U.K. Payments can be made between mobile app users, and they can send money from a linked debit card, credit card or bank account. Standard one-to-three day transfers are free, while instant transfers come with a 0.5 to 1.75 percent fee.

Google Pay

Google Pay is a P2P app that requires a Google account to use. A Google Pay account can be linked to a debit card or bank account to send and receive money. It also allows users to link their Paypal accounts, allowing them to use their Paypal balance for transactions. In addition to P2P transactions, users can make purchases using Google Pay either through contactless payments in stores or online. It takes one to three business days for money to transfer into your bank account from Google Play. If funds are transferred to a debit card, the transfer is usually instant, but there’s a fee of 1.5 percent or 31 cents, whichever is higher.

How much do P2P payments cost?

P2P payment services typically charge nothing to use or download their products, but there are a few fees that may be charged in certain circumstances, including:

  • Instant transfers. Some of the P2P apps give users the option to make either a standard or instant transfer from the app to a linked account. Standard transfers are free, but it may take a couple days for the money to show up in your account. If the funds are needed instantly, you’ll pay a small fee. Cash App, for example, charges a 0.5 to 1.75 percent fee for instant transfers. Zelle and Popmoney partner with many banks and charge no transfer fees.
  • Debit or credit card fees. Usually using a bank account to send money through a P2P app is free, but if a user needs to link a debit or credit card instead, there may be a fee. For instance, Paypal charges 2.9 percent plus a fixed fee (that varies by country) when money is sent from a linked debit or credit card.
  • International fees. A few P2P services allow for payments to be made between users in different countries. International transactions come with a fee, such as the 5 percent international fee that Paypal charges.

Which P2P payment provider is best?

Though all P2P payment providers allow users to digitally send money to other people, they come with different features and fees.

P2P services provided by a bank, like Zelle, may be more convenient since they can be accessed directly from the bank’s app. But they do have some limitations, such as on who you are able to pay.

Alex R. Jimenez, managing principal for financial-services consulting at EPAM Systems, prefers Venmo, which isn’t partnered with any bank. “When you’re making purchases with certain organizations, you’re able to use Venmo, but you’re not allowed to use Zelle. Mom-and-pop places — or even a plumber I had come — they say you can pay with Venmo; Zelle would not really be appropriate for that.”

P2P services typically only allow users to send and receive money to others in the same network, so which service others around you use may factor into your decision about which app to choose. If a recipient uses Venmo, for example, but the sender only downloads Cash App, they won’t be able to send money between each other.

Meanwhile, for someone who needs to send money overseas, a service that offers international payments may be best. Paypal offers services around the globe, and Cash App is another option if you need to send or receive money from the U.K.

Are P2P payments safe?

Although P2P payment apps are popular and convenient, there’s always a risk associated with using them.

“The companies that own these apps feel that they are not covered by some of the laws that regulate payment services,” says Linda Sherry, director of national priorities at Consumer Action, a nonprofit advocacy organization. “It’s this large loophole where people can be defrauded pretty easily, when a bad actor convinces consumers they’re a member of the bank or in charge of fraud at the bank.”

The Consumer Financial Protection Bureau (CFPB) is responsible for protecting consumers against fraud, but, according to Consumer Reports, regulators do not enforce CFPB regulations in the context of P2P payment apps. As a result, consumers are held responsible for errors, such as sending money to a scammer.

Sherry recommends that consumers only use P2P payments among people they know. “Know who you are sending money to, and be suspicious,” she says. “If it sounds too good to be true, it probably is.”

Are P2P payments fast?

P2P payments can take anywhere from a few seconds to several days to go through to a user’s bank account. Some P2P services send funds directly to another user’s bank account, while others require the receiver to make an additional transfer of funds from the app to their bank account or debit card. This additional transfer may take longer.

With Zelle, for instance, payments are relatively instant and deposit directly into the receiver’s bank account. But many other P2P apps charge a fee if you want to make an instant transfer from the app to a bank account or debit card. To avoid this fee, you’ll have to elect for a longer, standard transfer, which may take a few business days to complete.

Alternatives to P2P payments

  • Direct wire transfers. Wire transfers through a bank might be a good alternative for those looking to send large amounts of money quickly, as P2P services may limit how much users are allowed to send. Fees for wire transfers can be lofty, ranging up to $50. Additionally, foreign exchange fees apply to international wire transfers.
  • Writing a check. Checks are a traditional way to make a payment to a person or business. Consumers can purchase checks from their banks, but banks can charge a high price for check orders. Once a check is deposited, it can take several days to clear and for the funds to become available. Also, though checks serve as physical proof of payment, it doesn’t make them immune to scams.
  • Money orders. Like checks, money orders are a paper form of payment, except they are paid in advance and aren’t tied to a bank account. You may be able to buy a money order from a post office or grocery store by paying for the amount you’d like to send plus fees. Upon receipt, the recipient can cash it in or deposit it to a bank account like a check but with the guarantee that it won’t bounce.
  • Online bill pay. Many banks come with online bill pay services that make it easy to send bill payments, instead of paying bills through a P2P app. Users may be able to set up automatic payments and can view all bill payments online. But an online bill pay service can only be used to pay bills, not for sending money to friends or family.

Bottom line

As consumers spend more of their daily lives online, they can expect P2P services to become more widespread and banking to become more digital overall.

Fewer people carry cash and getting it can be inconvenient, says Jimenez of EPAM Systems. “As we start using Venmo or Zelle or anything like that, you see other things kind of following suit. You become more likely to be using digital payments for what you never thought you’d be doing.”

P2P payments can add convenience to everyday transactions, like splitting a bill or sending some aid to a friend or relative. But with any digital financial services, there’s always the risk of being exposed to potential cybercrime. To stay safe, protect your login information and know who you’re sending money to, so the funds don’t end up in a scammer’s hands.