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HOW DO PEER-TO-PEER PAYMENTS WORK?

A P2P app is built on relationships, banking, and technology.

Enroll with Zelle®

IS P2P RIGHT FOR ME?

What is a peer-to-peer (P2P) payment? Think of it as a digital replacement for cash or a check. Rather than using physical dollar bills to pay your friends and family, you can use an app on your phone. Depending on the platform you use, your money may be received within minutes of when you hit send.1

Understanding P2P Payments infographic

Peer-to-peer payments offer the benefit of convenience and, in many cases, speed. For example, say you are at a coffee shop before a concert. Your friend bought the concert tickets and you bought the coffee. But, the tickets cost five times as much. How do you even up?

Rather than finding an ATM, or asking a barista to break a large bill, or mailing a check when you get home, you can send the exact amount with a few clicks on your phone. And that’s it; you did it without even leaving your seat.

P2P How-P2P-Works Infographic

How Do I Set Up Peer-to-Peer Payments?

Peer-to-peer payments may be easier to activate than you think. Many banks and credit unions support a P2P system within their own apps, for example, by offering access to Zelle®. Check with your financial institution to see if Zelle® or another P2P solution is offered. By using the P2P app offered by your financial institution, you will likely benefit from an easy set-up.

Or, if you have accounts with Apple™ or Google™, you can link a credit or debit card to your account and use Apple Pay™ Cash and Google Pay™, respectively. Lastly, if none of the above options make sense, you can download another P2P app of your choice and link it to a credit card, debit card, or bank account.

What is the Best Peer-to-Peer Payment App to Use?

While the user experience is important, remember that many apps can only transfer payments to individuals who also use the same app. For example, even if you really like the interface of a lesser-known P2P app that functions in this manner, if none of your friends are on it, it doesn’t help you much.

Keep in mind, though, that Zelle® is already available to over 140 million consumers in their mobile banking app or through the Zelle® app. So even if your friends don't use the same bank as you, you can still send and receive money quickly and easily with almost anyone who has a U.S.-based bank account. As of this writing, Zelle® is offered by over 1000 different financial institutions, including Old National Bank. See if your bank is included.

If your bank doesn’t use Zelle®, PopMoney is another app that connects through many banking apps. Or, Venmo is a popular stand-alone app.

Some Stats on P2P Payments2,3,4

$490B Zelle® payments in 2021
$230.1B Venmo payments in 2021
44M Monthly users of Cash App from Square


An additional factor to consider: Do you want to pay businesses digitally as well? While you can use Google Pay and Apple Pay (via Apple Pay Cash) to pay friends, they are primarily used for digital payments to merchants. When visiting a store, simply hold your phone next to the payment terminal with your finger on your phone’s ID system to complete a transaction. And, you can use the app when shopping online. (Note: Samsung Pay allows you to pay merchants, but not other individuals.) You can also use Zelle® to pay some small businesses when you are enrolled with Zelle® through your financial institution.

For many users, it makes sense to have multiple P2P apps. This gives a measure of adaptability. For example, you may choose to have both Apple Pay and Zelle® (through your bank), so that you can easily make payments in a variety of situations, to a variety of recipients.

Who is Using a Peer-to-Peer Payment App?

You may have already used a P2P app without realizing it. Have you heard of PayPal? Founded in the late 20th century, it was the first peer-to-peer payment app. By the early 2000s, it was used regularly on the auction-sale website eBay, as a way for buyers and sellers to efficiently and securely pay each other directly, via computer. The app has grown to 429 million active users (as of the beginning of 2022), according to Statista.5

With mobile P2P, there was a wave of innovation in the 2010s. Some well-known apps popularized during the decade include Venmo, Zelle®, Google Pay, Apple Pay Cash, Square’s Cash App, SnapCash, and Popmoney. By the end of 2019, an estimated 96 million U.S. mobile users (40.4% of total users) made at least one P2P mobile payment per month, according to eMarketer.6 

Are P2P Payments Safe?

The payment systems themselves are generally very safe. For example, when you use Zelle® in your mobile banking app or within the online banking experience, money is sent and received using only an email address or U.S. mobile phone number, so no banking information is shared and your personal information is protected. When you use Google Pay or Apple Pay, the payment is done via digital token, so the payee cannot see your actual debit or credit card number. PayPal, which is intended to be used more like a credit card, uses encryption technology, 24/7 account monitoring, and protection of your full financial information.

In most instances, however, remember that P2P payments should be considered a replacement for cash. If you don’t know the person, or you aren’t sure you will get what you paid for, you should consider alternative forms of payment, like a credit card. These transactions are potentially high risk, just like sending cash to a person you don’t know is high risk.

That said, the safety of sending P2P payments to unknown individuals varies depending on the platform. For example, both Venmo and Zelle® are clear that they offer no purchase protection program for any payments you authorized. You should also check with your bank to see if it offers purchase protection with any P2P functionality within their mobile banking app as well. In contrast, PayPal has robust purchase protection and dispute resolution programs — the company has set up a system where PayPal payments can be used like a credit card. In short, before you use a P2P app, you should know how it is intended to be used and what protections are offered.

You also need to confirm contact information before sending money. This is a simple precaution and easier than it sounds; once you enter a contact’s information into your app and make a successful payment, the correct contact information can usually be stored for next time.

How Do You Set Up Peer-to-Peer Payments?

Go to the app store of your choice, and chose the app you want to use, download it, and follow the prompts to set up your account. Once you get your P2P app enabled, you can add trusted payees at the outset — or add them as you make payments.

With Zelle®7, remember that you can often access it through your bank or credit union’s app. In some cases, you can do it via a browser. You simply need to enroll with your U.S. mobile phone number or email address. View our Zelle® instructions to see how it is done at Old National.

Or, if you are a client who wants to start using digital banking8 and making peer-to-peer payments, it’s a two-step process. First, enroll in digital banking. Then, enroll with Zelle®, and get started with P2P payments today.

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1 Transactions typically occur in minutes when the recipient’s email address or U.S. mobile number is already enrolled with Zelle®.
2 https://www.zellepay.com/press-releases/nearly-half-trillion-dollars-sent-consumers-and-businesses-zelle-2021
3 https://newsroom.paypal-corp.com/2022-02-01-PayPal-Reports-Fourth-Quarter-and-Full-Year-2021-Results
4 https://www.businessofapps.com/data/cash-app-statistics/
5 https://www.statista.com/statistics/218493/paypals-total-active-registered-accounts-from-2010/
6 https://www.emarketer.com/content/the-mobile-series-mobile-peer-to-peer-payments-infographic
7 Zelle® is intended for sending money to family, friends and people you are familiar with. We recommend that you not use Zelle® to send money to anyone you don’t know.
8 Mobile Banking requires that you download the Mobile Banking app and is only available for select mobile devices. Message and data rates may apply.

All rights reserved. Terms and conditions apply. Zelle® and the Zelle® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.