P2P payment / Person to person payment

P2P payment means a digital transaction between two parties, primarily private individuals. The advantage is that it also makes lending between individuals fast, convenient and simple.

P2P payment ("person to person payment” or “peer to peer payment”) between persons online payment, means sending money. In practice, it is a transfer on an internet interface or something on a mobile application, or even via an e-mail. Such services are usually a favorable payment alternative for transactions of smaller amounts, often between each other. 

P2P services have a decades-long history: one of the pioneers of these payment systems is available worldwide PayPal. The digitalisation its rise to prominence and is closely related to it fintech thanks to the revolution, since then many new service providers have appeared on the market.

P2P payments owe their popularity primarily to the fact that, in order to send money, it is enough to know the other person's e-mail address or mobile number, i.e. there is no need to remember, ask for and enter long account numbers, and provide a lot of other data. 

P2P payment is not only easy and convenient, but also generally cheap. With several service providers, transfers are free under a certain amount. The fees for foreign transfers are typically much more favorable than traditional bank transfers, and the exchange rates are also more favorable.  A big advantage of P2P payment is speed, as the amount arrives almost immediately on the target account. 

What has so many advantages almost always has some disadvantages. In this case, it can be a risk that the interface of companies providing P2P payment systems can be accessed with a simple registration, where bank systems provide more solid security. 

The spread of P2P payments is embedded in peer-to-peer lending. The essence of this is that equal parties, i.e. private individuals, can lend to each other, which enables quick and often cheap access to credit. However, the lack of regulation and banking practice also carries serious risks, since it does not preempt these loans credit evaluation, and the accompanying active risk management is also missing.