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Paying the Price of Trust: Peer-to-Peer Payments

Financial Services

Published on March 10, 2025

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Peer-to-peer (P2P) payments are digital transactions allowing individuals to transfer funds directly to one another using electronic platforms or applications. These services enable users to link their bank accounts, credit cards, or digital wallets to swiftly send and receive money. Popular P2P platforms include PayPal, Venmo, Zelle, and Cash App. To sign up for one of these apps, users can either enroll in an eligible bank account or create an account through a P2P platform that can be funded by a bank account, debit, or credit card.

These payments use a recipient’s phone number or email address linked to their P2P account to send funds quickly. Services are often free for transferring funds between P2P accounts or linked bank accounts, but occasionally, providers require fees of about 3% to process a credit or debit card. Money exchanged in P2P payments can typically be used immediately when sent through a bank account or in an app. For P2P services that aren’t directly linked to a bank account or digital wallet, money is typically available within one to three business days. Consumers often use P2P payments to split restaurant checks, pay friends back, etc.

The evolving landscape of P2P payments necessitates a balanced approach, ensuring consumers benefit from the convenience of these services while being shielded from potential risks. Ongoing collaboration between regulatory bodies, financial institutions, and technology providers is essential to maintain the integrity and security of P2P payment systems.

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