P2P Payments: What is P2P and why do you need it?

written on July 13, 2022

If you were to take a minute to think about your day, you would realise just how much of it you spend online. Our digital presence has increased exponentially over the last few years and most of us have shifted a good portion of our lives to the virtual world—whether we’re behind a computer screen at work, watching a series with our loved ones, or handling basic daily life admin in the time in between.

And yet, there are others who might still feel a bit hesitant about the age of the internet. Perhaps, there are security concerns that prevent them from taking the digital leap, or the tech jargon inherent to online activity might deter them from stepping into the online world with the confidence they need.

In this article, we will be looking at one such term—P2P—in order to see what it is, how it works, and to find out how such concepts, once we extract their meanings from their obfuscating wrapping, can have very practical advantages for our non-virtual lives, and with the peace of mind we all want and need whenever it comes to our finances.

Key takeaway

Your best bet for convenient online transactions is P2P payments. All you need is the Moneybase app and an internet connection. P2P payments on Moneybase are fast, free and safe - just the words you want to hear. Other money transfer options are also available on the app.

- What is P2P?
- What are P2P payments?
- Why should I use P2P payments?
- How can I make P2P payments on Moneybase?
- Are P2P payments safe?

What is P2P?

P2P stands for peer-to-peer or person-to-person, so its main benefit is that it facilitates any activity to be carried out directly between one person and another, without any intermediaries that might weigh the process down. P2P services are decentralised because they are not affiliated to any third-party intermediary; instead, two individuals can interact directly with each other to complete a variety of actions.

You may have already been exposed to some of the different applications of P2P systems, even if you did not know you were using them in the first place. For example, P2P platforms enable users to network directly and are commonly used for filesharing purposes. In fact, this is was what helped popularise the peer-to-peer concept at its inception. And if you have ever been on social media to get your hands on a second-hand bargain in an online marketplace, then you have already benefitted from the perks of a P2P service.

In this day and age, the physical and material aspects of our lives have been reconfigured in terms of the ‘internet of things’, and P2P is one more facet of this phenomenon. Specifically, P2P allows internet users to form direct connections and networks, even though modern P2P services are no longer purely internet-based.

What are P2P payments?

Despite its omnipresent application for non-financial uses, however, P2P is most notable for how it can speed up the process by which money changes hands in an online context. P2P payments are therefore electronic money transfers between two people, and this is what allows you to send and receive money to or from your friends, all through an app on your smartphone.

You can choose who to send money to, the amount you want to spend, and even include a brief note to describe your transaction. And don’t worry, you will always be prompted to confirm your payment before it is sent, while notifications will help you monitor incoming funds as well.

Why should I use P2P payments?

Because it’s convenient, plain and simple. Forget about cash and coins, or the irritating business of calculating change. And of course, you can also walk right on past the long queue of people waiting to withdraw at the ATM machine. All you need with P2P payments is your phone and an internet connection.

In addition to the convenience of bypassing cold hard cash, the appeal of P2P payments largely rests on its speed factor. If two people want to exchange money through the P2P feature on their app, they can expect to do so quickly and seamlessly, without the delays often associated with bank transfers.

This quick and easy direct payment is tremendously convenient for real-life use. You can instantly send your colleague the money you owe them for yesterday’s lunch; you can pay a seller in a virtual marketplace with a few taps on your screen; or you can send your loved one an electronic cash gift. Whether you're paying your babysitter or your electrician, P2P payments can make any transaction that much easier.

Apart from being frictionless, P2P payments also means that you will only have to look at your phone in order to track all your spending. Your transactions history is easily accessible, while real-time notifications alert you as you send or receive money.

However, it is important to understand that not all P2P transactions are instant if they involve transferring money out of the app. For example, if you are making a payment from an app to someone else’s bank account, the transaction might take up to a few days to be finalised due to the third-party bank involved.

In addition to the obvious convenience of making such payments so quickly, P2P transactions are generally free of charge, even when linked to a bank account. However, you will need to make sure since some providers do charge fees to process payments. Once again, in-app transactions, from one app user to another, do not normally come at a cost.

How can I make P2P payments on Moneybase?

Sending and receiving money with Moneybase is a breeze, and here's how to get the job done.

From your app's homescreen, tap on the payments icon at the bottom and select 'Contacts'. At the top, you will be able to see the list of contact you have who are already using the app. In this manner, you will be able to send money directly to other contacts from your phone. Just tap on the contact's name to get started, key in the amount you wish to transfer, and swipe the tab right to authorise the payment.

If you want to pay someone who is not using the app, you can also invite them to sign up.

Remember that Moneybase is not limited to P2P payments, and you can transfer money electronically using other means, like SEPA transfers, and you can also order a physical card or set up a virtual one.

The app will also help you track your spending. You will be able to find all the transactions you have made on the app’s homepage, so this can help you stay on top of your money-management strategy. You don’t have to worry about whether you’ve forgotten to make a payment or how much you have actually spent. All you have to do is open the app to find out.

In-app P2P payments on Moneybase are free of charge. Opening your Moneybase account is also free, as are a number of services available on the app. All fees are transparent and available here.

If you haven't got the app yet and want to get started, click here.

Are P2P payments safe?

The online world can sometimes seem like an obscure and dangerous place where cyber criminals are ready to pounce. While this feeling is not unfounded, it is worth noting that any reputable digital payments app will have inbuilt security checks, fraud monitoring systems, and support teams to prevent and resolve unauthorized transactions. Providers of such apps will have their security procedures and fraud policies available on their websites, so you can always read up ahead of creating an account.

The Moneybase app comes with several robust security checks and regulatory restrictions to protect your account against any risks. And because Moneybase is not an online bank, it comes with the additional advantage of low risk exposure, since the money in your account will not be lent out.

If you have more security concerns about online payments, read our explainer to learn more about the processes involved in digital transactions and the steps you can take to protect your money.

Top tip for P2P payments

Always make sure you check before you start tapping away. When entering data, such as a contact’s name or phone number, always make sure you are not mistyping any details, and double-check before you send a payment. Also, read the Ts & Cs or the fine print so that you don’t incur any surprise fees if you are not using P2P payments, especially when synced bank accounts are involved.

Now that you know how these quick and convenient P2P payments can lift at least one of the burdens of your financial transactions, jump on board by downloading the app from App Store or Google Play and set up your account. The app’s P2P payments feature will help you understand just what we mean when we say that Moneybase makes money simple. And if you need any help, you can always contact our human support team, available seven days a week, by telephone on +356 25 688 688 or through the in-app chat.

Moneybase payment services are brought to you by Moneybase Limited (MB) C87193, which is licensed by the MFSA to transact the business of a Financial Institution in terms of the Financial Institutions Act, Cap 376. Moneybase Invest and all investment services are brought to you by Calamatta Cuschieri Investment Services Ltd (CCIS) C13729 and is licensed by the MFSA to undertake investment services business under the Investment Services Act, Cap 370.  

Moneybase Invest offers direct market access and speed of execution and is intended for knowledgeable and experienced individuals taking their own investment decisions. The value of investments may go up as well as down and investors might not get back the original amount invested. The contents of this article are not intended to be taken as a personal recommendation to invest but strictly based on research and for information purposes only. Investors should contact their financial adviser for a suitability assessment prior to taking any investment decisions. 

MB and CCIS are both subsidiaries of the CC Finance Group plc with their registered address situated at Level 0, Ewropa Business Centre, Dun Karm Street, Birkirkara, BKR 9034, Malta. www.moneybase.com   

Redefine the way you grow and manage your money today!

Life’s full of mysteries. Your money shouldn’t be one of them.

Redefine the way you grow and manage your money today!

Life’s full of mysteries. Your money shouldn’t be one of them.