#fintechupdates Archives

5 Ways Fintech Industry is Using Artificial Intelligence

Posted on 30/09/202113/11/2021 by Tushar

The bond which is getting seeded between Fintech business and Millennials is poised to be extremely strong. At the back of the digital inclined focus that Fintech startup companies have been operating with, the domain – as a whole – is staring at a time of complete revamp. While Fintech companies have been quick to adopt this changed demographics, the only answer to how banks could recreate themselves in the age of millennials lies in intelligence. They will have to learn the tricks of trades via introducing artificial intelligence in fintech.

Let us walk you through the Uses of AI and ML in fintech for Millennials, highlighting what both Fintech companies and banks can work around.

Since the past many years, the millennial user group has been upending the markets, making companies scramble to find the right approach to attract the industry’s first digital natives.

With more of these young adults entering the workforce and investing in their futures, monetarily, The Fintech industry too is soon realizing that it will have to relook at its complete approach to appeal to this demographic’s unique set of expectations and needs. In other words, they cannot move with the business as usual mindset with this smartphone generation.

While the millennial class of customers and users have been given a number of unflattering names in the recent years, like “trophy kids” and “entitled”, this tech-savvy lot has been hailed for being progressive and more acceptable of new finance app ideas compared to the last generations.

Millennial users value convenience and transparency. They demand personalized finance service and product on their fingertips, which is not restricted on time and geography. These primal set of characteristics are what Fintech companies need to maintain when aiming to maintain a competitive advantage in the climate of fast-evolving technological and demand change.

Many Fintech companies have already seized upon this niche opportunity – of millennials expecting digital-first service – at the back of the understanding that the traditional banking avenues are getting phased out. They, individually or in partnership with banks have started exploring the mobile domain to match the shifting consumer trends.

Even in the mobile domain, Financial mobile app development companies are now exploring avenues to present themselves as innovative brands which are aligned with the technical inclination of the end-users.

One such avenue that Fintech companies are focusing upon is Artificial Intelligence.

Artificial Intelligence is one of the biggest disruptions of the business economy with almost every vertical either embracing the technology or planning to add it into their process by the next 5 years. In fact, AI is found to be one of the prime fintech trends for 2020 & beyond, and fintech centric AI and Machine learning app developers are also putting efforts to excel in this field.

The industry is finding use cases specific to Artificial Intelligence which answers why Fintech is targeting millennials using AI to not just improve the millennial customers’ experience but also revamp their business model to its entirety.

Let us look at some of the used cases that the Fintech industry has found in terms of using Artificial Intelligence to change their mobile offering. These cases should be read as a series of new opportunities for a Fintech startup.

Uses of Machine Learning and AI in Fintech for Millennials

1. Algorithmic trading

While Algorithmic trading is not a new concept in the finance domain, using AI to effectively perform the task on millions of devices is.

[Algorithmic trading uses complex formulas, combined with mathematical models and human oversight, for making decisions related to buying and selling of financial securities on the exchange.]

A great number of financial companies invest in the algorithmic trading practice as the frequency of trade that is executed through machine learning is next to impossible to replicate manually.

2. Better Targeting

A better chance at targeting is what the core ML and AI benefits in banks are.

Millennials demand personalized service on their fingertips independent of the time and place. For the purpose, fintech companies are making use of machine learning-driven robotic advisors to replace the need of human advisors at all waking hours.

This robo-advisors target towards millennials is driven with the aim to not just attract them but also remove massive processing costs for the financial institutions. The extent of personalization and promptness that the robo-advisors offer is the answer to what is the impact of AI in financial services.

3. Better Customer Support

One of the primary uses of advanced automation and AI technology in the finance industry can be seen in how the Fintech companies and banks are making their customer service digital and real-time. Let’s give a much closer look at examples of how integration of AI in customer support services can be made possible and how it becomes one of the top benefits of artificial intelligence based apps, especially those which are centered around banking and other financial services:

Chatbots

Chatbots are the basic most answer to how Fintech is targeting millennials.

By 2022, banks might automate over 90% of their interactions through chatbots (Foye, 2017).

By making use of technologies like chatbots, AI helps financial institutions solve users issues instantly. A reason why businesses look for the cost of Cleo like chatbot app. Bank of America, for example, introduced a chatbot named Erica to give their customers instant information about their transactions, account balances, and other similar information.

Personalized experience

Personalization is an answer to building long-lasting customer trust and loyalty for any organization and business. People, especially when interacting with finance-related matters value deep relationships and transparency with the institution and mobile app. This is one of the main reasons why people appreciate the introduction of AI in banking and other fintech solutions.

Personalization is the number one thing that businesses ask for when asking how to use AI to develop next-gen apps. ML algorithms can help in analyzing customers’ information and predict the services that would most or least impress the Fintech users.

A few examples of personalization in AI-backed Fintech applications can be seen in:

Capital One Second Look program, launched by Capital One monitors expense patterns. After an in-depth analysis, it helps detect if customers have been charged twice for the same purchase and can inform them in time. The platform also analyzes the tips that customers leave at the restaurant and inform them if it is over what they can afford.
MoneyLion, the personal finance platform also displays tips and tricks card and blogs to their customers depending on their monetary activities. “We have bank transaction data, credit behavior and location data; we want to be able to match that with a set of advice and recommendations,” said Tim Hong, chief marketing officer at MoneyLion, which connects to customers’ banks accounts through an API.

Applications like these clearly show the importance of AI and machine learning in financial sectors to make millennials feel important and motivated to remain hooked with the application.

4. Help with underwriting services

The underwriting process is related to assessing risks which every financial service users come with. The role of AI in this fintech process comes in the face of analyzing the true worth of the applicants by looking into their stringed data, especially ones related to their personal spending abilities on social media and other places.

The AI algorithms also help in assessing and predicting the underlying loan trends which can influence the financial sector in the coming time.

5. Stock Market Changes Prediction

With the stock market becoming one of the best investment choices for millennials, the demand for apps that would help make the navigation easier has grown. Something that has helped define newer applications of ML and AI in the fintech industry.

Several AI-backed mobile apps have been introduced which analyze the past and real-time information related to companies and their stocks. And on the basis of this information, they help investors identify which stocks should be invested in and which would prove to be a bad investment choice.

So here were the 5 uses of Machine Learning and AI in Fintech for millennials’ user base to get their attention and make them remain invested in the mobile-based financial offering. An offering that fintech companies provide with the help of their partnered AI and Machine Learning app development company.

Now that you know why fintech companies are using AI, it is time to invest in AI based fintech app development.

Having developed multiple AI software and apps for fintech startups and establishments, we have mastered the art of integrating Artificial intelligence and ML in financial processes.

Let us help you.

Fintech impacts on Business

Posted on 10/10/202011/06/2021 by Tushar

The Finance world, while having established itself as a secure industry is also the one that frequently becomes the victim of a number of glaring issues like lack of transparency, a still less real-time ecosystem, and a case of slow digitized adoption.

All the prevalent bickering, questioning voices when meet with issues like the 2017’s attack of a Trojan horse virus Ramnit which affected the financial sector widely, accounting for around 53% of attacks, becomes a voice seeking complete transformation.

A transformation that 2019-2020 is expected to bring with it.

Attacks like this and several others, along with the need to bridge the gap between the general population and the real-time access of their money, has brought up a dire need of adding technological innovations into the traditional financial processes to improve its status quo and deliver better services to the end users.

A technological innovation known as Fintech.

Fintech or Financial technology is revamping the Financial as well as other business verticals by significant numbers. The pace at which FinTech is moving has ensured that the popularized segment will contribute to 25% of the revenues that the Financial sector would draw.

This has increased the necessity to develop a Fintech app and embrace the Fintech solutions into our business, about which we will discuss in this blog – starting with the importance of considering Fintech app development.

Why Invest in Fintech App Development in 2019-2020?

From Coinbase to Avant, Credit Karma, Mint, and Stripe, several fintech solutions have changed the way companies have been doing business so far. They have transformed the traditional business models and made it necessary for businesses to invest in Fintech mobile app development in 2020 and beyond, if they wish to avail benefits such as:-

1.Easier Payment Process

The foremost reason to develop a Fintech app in 2019-2020 for businesses is easier payment process. The Fintech solutions prevent the consumers and business owners from going through the cumbersome, time-consuming process of cash and credit/debit card based payment. The transactions can be easily made online using banking apps, digital wallets and even Cryptocurrencies (which are gradually resulting in the rise of Blockchain wallets in the market).

*Side Note* Fintech, by embracing Blockchain technology, is not just set to revamp the future of transaction, but has eliminated the intermediaries, added transparency and security to the process, and accelerated the whole mechanism, which has brought a sense of satisfaction among both the customers and business owners.

2.Evaluating Risks Effectively

Fintech solutions have taken the market by storm by making it easier to predict and overcome risks. It scans a vast amount of information from different sources and uses a wiser approach while lending loan or making any transaction, which is cutting down the risk of errors and frauds.

3.Faster Investment

Fintech has eliminated the need of hiring a human financial advisor by providing 24×7 consultation and advice through mobile apps. This has accelerated the process as well as provided us escape from biased suggestions. Besides, Fintech solutions have brought the banking and non-banking organizations on the same platform which has opened new doors for Entrepreneurs in terms of gaining loans and investments.

4.Lower Cost

As per the market insights, the primary challenge to entry into the financial business has been cost. By making the financial services available on devices that millions of people have, i.e. smartphones, Fintech has improved the PoS (Point of Sales) system and cut down the expenses of the businesses, along with gaining sophisticated analytics data to better engage their audience.

While these are some of the prime reasons making investment in Fintech a profitable deal, there are various factors that have placed Fintech at a prominent place in not just the present but also the future of a number of business segments.

Something that we are cover now.

What makes Fintech the Driving Force of Future Businesses?

Fintech is proving to be a disruptive force for the financial and other business verticals. It is helping them improve their business models and lessen the associated risks – be it payment, lending process, wealth management, or any other such finance-related activity.

The technology is adding higher value to the consumer experience and market strategies by incorporating cutting-edge techniques and tactics into the process, which is eventually drawing the time of disruption of the future of business world.

A few factors that are ensuring the prominent presence of FinTech in the world around us are:

1.Rise of Millenials

The foremost factor that made Fintech a disruptive force in the business world is the millennial generation. The millennials highly depend on social media platforms for gaining information or financial advice, which has been a challenge for the conventional financial institutions. They are more demanding and less loyal – asking for personalized services at the speed of light.

As per a report, 1 out of 3 millennials changes their bank in every three months in hope of getting desired experience, which is increasing the need for technological advancement in the Financial industry, i.e, the rise of Fintech solutions.

Fintech startups and established companies, as compared to the conventional financial institutions, are offering better services at data utilization and customizing the options as per the users’ needs and preferences using technologies like artificial intelligence for finance, which is making millennials far more satisfied and helping businesses gain higher revenue.

2.Payment Apps and Digital Wallets

The surplus use of P2P payment apps and digital wallets, has not just bought a rise in the query on how to develop a P2P app, but is also proving Fintech to be a disruptive force in the market. These payment apps and digital wallets are providing users with quick and secure access to their money and send/receive any amount at any time and pay their utility bills without running for their pocket or purse.

This convenience is gaining higher momentum in the market and encouraging the business to invest in Fintech app development, in an ode to join the list of most frequently used payment apps.

Now as you know what factors make Fintech a catalyst in the business world, let’s look into the impact of Fintech on different sector:-

Different Sectors Where Fintech is Bringing Considerable Changes:-

After revolutionizing the different process of banking sector, the Fintech technology has moved on to creating a considerable impact on other prominent businesses. But before we explore each business vertical individually, let’s look into what percentage of respondents in different industries think that Fintech will disrupt their domain, as shared in the image below:-

1.On-demand Economy

Fintech is transforming the On-demand economy in a multitude of ways – both for customers and drivers.

It is making the ride payment process one that is not suffering from any time lags by allowing users to connect their bank account with the ride-sharing apps, thus preventing any daly and time gap.

It is providing drivers with small business banking tools like expense management and automatic invoices which will ease the financial processes and upgrade their productivity.

The impact of FinTech in Ride-Sharing economy is so much so that in 2019, various insurance companies and Fintech startups will also invest heavily in the taxi-hailing industry, offering all the services to the users on the same platform. In addition to this, the top Blockchain-based Fintech apps like Coinbase will increase their interest in promoting making transactions and sharing e-gift cards in the On-demand mobile apps.

2.Healthcare

Fintech is spawning new opportunities in the healthcare industry, helping with mitigation of the current challenges and providing exemplary experience to both the patients and healthcare service providers.

On one side, the Financial technology is serving the industry with seamless payment solutions, while, on the other side, it is, in 2019-2020, poised to pave new ways for several lending and insurance purpose. Various medtech startups have added Fintech to their services in an ode to provide all the medical-related services under one roof, an example of which is Practo.

Also, a significant rise will be observed in the adoption of Blockchain technology in Healthcare industry, implying payment will be possible through virtual currencies (Cryptocurrencies) in addition to a higher level of data security through Smart Contracts.

3.Retail

The retail industry is enjoying a wave of revolution with Fintech app development, especially in the payment and customer experience facet. It is providing users with an omnichannel experience, making it possible for the customers to interact with the Retail stores via different platforms. It is also simplifying the payment and checkout process, helping the retailers to cater to a wider audience. Two relevant examples of the impact of Fintech app solutions on Retail business are Fingopay and Perpule.

It is not over yet. In 2019-2020, it is estimated that the technology will boost the marketing strategy by empowering retailers to know what order have the customers ordered, paid for and returned and thus, plan a loyalty program accordingly.

Besides this, digital payment apps and social messaging apps will coincide, implying 2020 and beyond will make it possible to perform retail centered payment from all the social media apps and message via payment apps. The retail platform, through the payment gateway integration process will aim at creating an omni-channel presence by making it possible for the users to checkout from everywhere – the app, website and social media.

4.Government Ruled Banks

Fintech is also reinforcing the government banks by offering them multiple digital services and platforms to connect with users and deliver transparent and impactful solutions. One way through which they would be achieving this, is through the introduction of Open banking.

Open banking- a collaborative model where banking data can be shared among two or more independent parties via APIs – enables the government organizations to enhance customer experience, generate better revenue, and build a sustainable service model for conventionally underserved markets via a decentralized approach which is far beyond lending and data sharing. This is empowering multiple fintech innovators as well as various one-off bank agreements, which was not possible with the traditional financial industry model.

5.Crowdfunding

Earlier, it was tough to gain visibility in the market and raise fund effectively due to lack of platforms, resources and historical data preventing startups and established brands from getting into the claws of the frauds. But, with the introduction of Fintech apps, the Crowdfunding process is becoming a lot more streamlined. The technology is bringing more effective and profitable approaches by fostering P2P payment, easing the process of follow up with the investors and assisting the fundraising process.

It is also encouraging established financial services institutions like banks and NBFC to turn towards online fundraising platforms to extend their reach and offer better services in the market as “alternative investment”. In this way, fintech technology is contributing to bridge the gap between public and private investment, which will open up new avenues to get funds from.

Though we have covered why and how Fintech application development is bringing a major impact on the business world, having a look at the future fintech trends can help you plan a better strategy. So taking the same thought forward, here are some of the Fintech app development trends to expect in the year 2020 and beyond:-

FinTech App Development Trends for 2020 & Beyond

There are a number of technologies and trends that will become more apparent in Fintech realm in 2019-2020 and foster innovation in different business verticals. Such as –

1.Blockchain will Become a Prominent Part of Fintech Strategy

Blockchain, the technology behind Bitcoin and Cryptocurrencies, have already been considered to improve the Financial services across different sectors.

While the impact of Blockchain on Fintech has mainly been restricted to banking and other sectors for trading and supply chain management, by 2020, the technology will create more opportunities in the field of Payments Infrastructure, Digital Identity Management and Funds Transfer Infrastructure. It will be considered by 70% of financial companies for creating immutable record of their sensitive financial information and use them safely and securely.

In addition to this, the blockchain and fintech convergence will reduce the number of unbanked from 1.7 billion to less than 1 billion by the end of 2020.

2.AI will Enhance Financial Consumer Strategy

The fact that Artificial Intelligence is one of the biggest disruptions in the business economy with almost every business vertical either embracing the technology or planning to add it into their process by the next 5 years (as shown in the image below), Fintech mobile app developers will show a profound interest in this technology.

Fintech organizations and development companies will add AI, Machine Learning and Predictive analytics to their tech stack to understand the customer behavior, choices and preferences, and deliver better customer experience along with automating a significant amount of work at their end.

3.New Payment Solutions will be Introduced

With the advent of mobile payment solutions, visitations to banks have reduced by significant value and it is further expected to drop by 36% by the year 2022. In the same time period, mobile payments will grow by 121% with over 90% of users expected to be turning towards digital wallets and contactless payment solutions.

Besides, a major disruption will be noticed in this context with the adoption of Bitcoin and other cryptocurrencies because of their characteristics like faster transactions, ease of cross-border payment and enhancement in infrastructure. It will all ultimately result in an heightened investment in Blockchain Wallets – a decentralized concept that we have talked about in great lengths in our Blockchain Wallet guide.

4.CyberSecurity will Get More Attention

According to a PWC survey, 69% of financial services’ CEOs admitted to be more concerned about cyber-threats, when compared to those belonging to other sectors. They further shared that though they are employing various cutting-edge technologies, the security threats are continuing to exist due to involvement of third-party traders, complex technologies concepts, cross-border information exchange, etc. As a result, the cyber intruders are able to steal sensitive information and make millions of dollars, as we have seen in the case of Bangladesh’s central bank.

To combat such situations, the organizations will embrace different Fintech technologies – majorly Big Data and Biometric authentication. They will employ Big Data to analyze and predict the upcoming internal and external security issues and respond at the earliest. Besides, they will add biometric authentication to their processes to ensure that no unauthorized person could get access to their data, which will increase security, build trust and reduce the efforts and cost of securing their data via traditional means.

5.Digital-Only Banks will Gain Momentum

With the increasing mobile based banking and other financial solutions, there will be lower-to-no need of a traditional bank in the future. This will boost the concept of Digital-only banks, i.e, banks that have no brick-and-mortar outlets but provide the users with an access to all the banking resources and services virtually and swiftly.

6.Higher Investment Will be Made in Fintech

As shown in the graph below, the Fintech investments have risen from less than $1M in 2014 to more than $20M by the end of the year 2018, and these numbers are expected to increase in the coming years – making Fintech one of the revolutionary sectors in the coming 4-5 years.

Besides, there are more than 20 fintech unicorns right now, with 50% of them raised their growth exponentially in 2018 and five of them made debut in the list. Many more newcomers are expected to follow the same roadmap and deliver innovative financial products to consumers and enjoy better ROI, as shown in the image below.

Fintech, as we have covered in this article, has opened up a new world of opportunities for the business world – helping them deliver more innovative services, make better profits and that too on a fraction of money they have been investing earlier.

The segment has been bringing a major impact on the present and future of the business world, implying every business owner need to look forward to investing in Fintech app development to provide the users with higher value and generate higher revenue.

So, contact our team today to add the optimal fintech solutions to your business model.

Here’s how to Build a P2P Payment App

Posted on 30/03/202015/06/2021 by Tushar

Mobile apps and digital transformation have brought a major disruption in our everyday lives. They have made various activities simpler, faster, and secure – including making payment.

Today, there are endless Peer-to-Peer (P2P) payment applications in the marketplace that enable users to transfer money to others via credit/debit card or other contactless ways. These applications, not just aid in preventing visiting ATMs and banks, but are also emerging as the perfect companion in the field of splitting rents, sharing dinner bills, and splitting vacation bills.

A result of which is that the global P2P transactions are expected to hit USD 369.8 Bn by the end of this year, while the number of users is anticipated to be around 8 Mn by the next year. In fact, the global P2P payment market is said to be worth USD 3217.34 Mn by 2024.

This sudden rise in the usage of P2P apps over traditional ways and the revealing statistics have encouraged finance business leaders and mobile app developers to look forward to investing in Venmo-like P2P payment app development. A detailed study of which we will be doing in this article.

But firstly, let’s quickly refresh our basics.

What is Peer to Peer payment?

Peer to Peer Payments or P2P Payments is an electronic transfer made by one individual to another with the help of a mechanism that is called P2P Payment Application. Through these applications, every individual account gets linked to the other user’s digital wallet. As soon as the transaction occurs, the account balance in the application records it and pulls money directly from one user’s bank account or app wallet and sends it to others.

When talking about it in detail, every P2P payment app falls among one of the three prime categories, with each having its own benefits and set of market leaders.

Types of Applications to Look at Before Investing in Peer to Peer App Development

1. Standalone Services (PayPal and Venmo)

These types of online mobile payments apps do not rely on banks. They have their own mechanism of storing and dealing with money, without any link to any financial institution. They all have the Wallet feature which makes it possible for users to store money before offloading in some bank account or sending it over to their peers.

PayPal’s user base, since its inception, has grown to more than 202 countries where around 286 Mn users make 36.9 transactions per year, on average via 100 different currencies. Something that is enough to direct entrepreneurs and developers towards PayPal or Venmo like P2P payment app development.

2. Bank Centric (Dwolla, Zelle, and Popmoney)

Another app category to consider for taking advantage of P2P payment application development is Bank centric apps.

These mobile apps involve banks as one of the parties when doing transactions. While most of the banking institutions have their own apps, there are peer-to-peer payment apps that facilitate the fund transfer through its partner bank and credit unions. ClearXchange, which owns Zelle is developed by the top US banking institutions like BB&T, Chase, U.S. Bank, Wells Fargo, and Bank of America, making it one of the safest platforms, matching the safety standards of that of a banking establishment. These apps draw from and deposit directly into bank accounts instead of a stored currency account.

3. Social Media Centric (Facebook Messenger, SnapCash, Google Pay)

Social media centric apps are yet another type to consider when planning to develop mobile payment apps.

These types of mobile applications, launched by social media giants, enable users to transfer money using their credit/debit cards without exiting the platform. A few types are SnapCash, Softcard, and Google Pay.

Now while this has given you a clear understanding of what exactly a P2P mobile app is and what are the different types of mobile peer-to-peer payment apps, let’s move to the next step, i.e, the features to see when it comes to develop mobile payment apps.

Common Underlying Features in every successful P2P Payment Apps

There are some features that we, as a leading financial app development company, incorporate in the P2P payment app development process, every single time. These are the ones that you should have in the apps that you are all set to offer to the flourishing Fintech world.

Unique ID/ OTP

Every Fintech app has an OTP or unique id that is sent to and verified by the sender before the money is deducted from his/her account or wallet. To make apps even more secure, some P2P Payment Service Providers even ask for the OTP every time one opens the app.

Technical Frameworks used – Third party SDKs like: Twilio, Firebase, Nexmo, Digimiles

Notification

This peer to peer payment app feature allows people to inform when the payment has been initiated and when it has been received. Using this, users are notified of any of their account or wallet activity. For apps that have extended their services from just peer to peer transactions to individual transactions like bill payment, ticket booking, etc. this can be used to notify the users of the upcoming bill due dates.

Technical Frameworks used – Rest APIs, Chrome notifications, Amazon SNS, Firebase cloud messaging, and APNS.

Send Bill, Invoice

There should be a feature to scan and send the bill to the person who needs to make the payment. Along with that, both the parties: Sender and Receiver should be able to receive a generated invoice of the transaction, which should be saved in the app itself.

Technical Frameworks used – Rest APIs, Bamboo invoice

Transaction History

Transaction history is again one of the important features to consider when looking into how to build a P2P payment app. This feature would give the users the summary of all their past money transactions made through the app.

Technical Frameworks used – Rest APIs

Chatbot

To build a payment wallet app like Venmo, considering chatbot as a prime feature is also a profitable decision.

This feature helps in dealing at various points of disputes that can come up when transacting funds through an app, from a lost internet connection in the middle of the transaction to the wrong deduction of amount from the wallet or account.

Technical Frameworks used – Third Party party SDKs – Zendesk, Microsoft Bot Framework, LUIS, Wit.ai, Api.ai, Chatfuel, Facebook Messenger Chatbot, and Amazon Lex

Transfer Amount to Bank

Generally, users look for a way to transfer the amount that they receive through the apps to their bank accounts. While every app has its own set of business model, this is one of the most preferred features of the P2P Payment applications.

Technical Frameworks used – ACH, Dwolla

This is about the features that should be added in the apps. But along with the must haves, there are scenarios that should be avoided as well. While most of them are not in your hands, there are some technical issues associated with peer to peer app development that you can easily overcome by being cautious.

So, let’s move to the next step related to how to design a P2P payment system like Venmo.

Different Challenges in Developing P2P Payment App

Even though the world is now moving towards the digital money era, there are some challenges that the industry that persists and should be overcome for a P2P Payment App to survive in the mobile payments market. Let us look at both technical and non-technical challenges that are still staring at the P2P Payment industry –

Starting with Non – Technical first

Regional Limitations

The major players of the P2P industry are restricted in their geographical limitations. It is still not common for a P2P payment app development services provider to enable fund transfer between two nations. As the Fintech industry continues getting overcrowded, it is very important for a brand to expand their geographical reach in order to come out as an industry leader.

Lack of Open Loop Solutions

Presently, when making payments through P2P Apps, both the parties – one making the payment the other receiving it, should be on the same platform. While it is easier when we are transferring funds between people we know, there are times when we take or conduct one time payments with people we don’t know. The open loop platform enables the users to conveniently accept and transfer funds from/to anyone – eliminating the need for the involved parties to be connected through one platform or give-and-take personal information.

The cases of dispute

There are a number of disputes’ points that are associated with P2P Payment Apps. Suppose you initiate payment to someone and instead of going to him/her it goes to someone else or what would you do when an amount is debited from your wallet or account but the person it was supposed to reach, hasn’t received it. Like these, there are a number of things that can go wrong within the minutes of money leaving your wallet and reaching somebody else’s account. It is important that you keep a note of these issues before getting involved into the process to create a custom P2P payment app.

Slow changing Mindset

While people are adapting the methods of online payment and the increasing number of P2P apps, the industry is still growing at a slightly slow speed. People are still more comfortable in using cash and cards instead of mobile apps and the reason behind this is not the UI or accidental lagging, the reason is being unsure of the safety measures these apps follow to save confidential information.

While these were the non-technical issues hovering around the industry, let us now look at the technical challenges that can hinder P2P payment app user journey –

Now, the Technical ones

Security

One of the biggest technologies-related challenges that P2P app development companies face is security. Going by the track record, hackers have been able to get into some of the most secured institutions and platforms like NIC Asia Bank and PayPal. The high level of vulnerability has made Security one of the biggest challenges in the Mobile P2P Payment industry. With the huge number of confidential data being stored in one place, it is imperative for the P2P Payment service providers to create a secured data record management system.

Comply with PCI DSS

It is imperative for every brand dealing with confidential banking information to follow the PCI DSS Compliances. To be eligible for the certificate, the P2P Payment service providers should meet these criteria –

Develop and Maintain secure system and network
Have a vulnerability management system in place
Create strong access control standards
Safeguard confidential information
Continuously test and monitor networks
Maintain and update all information security policy

Currency Conversion

Another challenge that the P2P Payment Service providers face is calculating and converting currencies in real-time. With 180 currencies across the world, it can get difficult for the service providers to create a mechanism that keeps everything on track.

Along with this, the money conversion and fund transfer need to be done in the shortest time possible: an event that is easier when banking institutions are involved, but a little complex when it comes to a digitized market.

What’s the next level?

There are continuous symptoms of growth for blockchain and cryptocurrency use inside the mobile payments industry. The working behind bitcoin has even become one of the most talked-about topics in the current times. Companies like Movile have already realized the scope of using bitcoin within in-game micro-purchases. Bitcoin has even become an alternate mobile payment coinage in some developing economies such as Brazil.

Let us look at what Blockchain and Cryptocurrency is all about –

Blockchain technology

The Blockchain is an unsigned online ledger, which makes use of data structure to ease our transaction processes. It allows its users to edit the ledger securely without involving a third party.

While the bank’s ledger is linked with a centralized network, Blockchain is completely anonymous thus protecting its users’ identities. This anonymity makes the technology a secure way to do transactions. Blockchain is always implemented on distributed networks. The algorithm that it uses lowers the dependency on people to authenticate the transactions, giving Blockchain the potential to unsettle the prevalent financial systems.

The electronic record of transactions is incessantly maintained and then verified in the ‘blocks’ of records. Finally, the meddle-proof ledger is then shared between the parties on their computer servers by taking the help of cryptography.

Blockchain is expected to lower down the inefficiencies and costs involved in dealing with the financial sector.

Cryptocurrency

Cryptocurrency is a digital currency that exists and operates in digital peer-to-peer networks. It is not a string of data like your regular MP3 and Video files that can be copied. Cryptocurrency is actually an entry on a global ledger known as Blockchain.

How does it work?

When you are sending someone cryptocurrencies, you are not sending them a series of files. Instead, you are writing down the exchange in the ledger, a.k.a. Blockchain. Now even though Blockchain is a decentralized record, there’s no group of people who update the ledger, like what happens in banks. The mechanism is completely decentralized.

There are people who volunteer to keep the track of transactions and continuously maintain them in ‘Blocks’. So now when you want to transact currency, you will have to announce it to the table so that people who are maintaining the ledgers can update them.

Fintech along with its continuous advancements is all set to make Peer to Peer Payment much stronger and easier to adopt, giving a push to companies to get involved in the P2P payment app development process.