Payment App Development: How to Create an App Like Venmo?

payment app development
Faiza Khalid
CIS engineer | Developer | Tech Writer

Are you interested in payment app development and wondering how to create a payment app like Venmo? In this article, we answer just that question. 

We will be discussing the fast-growing e-wallet industry and how you can reap the rewards of this highly lucrative industry by developing a next-level peer-to-peer payment app.

What is a P2P Payment App, and why should you Build One?

A P2P payment application lets two peers send money to each other via in-app currency transfers using bank accounts or credit/debit cards as the source of funds. These user-oriented apps directly connect peers for faster and more convenient money transfers.

Top P2P payment service providers today include Venmo, CashApp, and Square Cash.

Modern users’ move towards innovative technologies, and the convenience such technologies offer in terms of carrying out bankless financial services, have made P2P payment apps a big hit in today’s world. 

The simple fact is that people need to transfer money for one reason or another on a very frequent basis. Walking to an ATM or a bank just adds to the inconvenience that financial operations usually involve.

An online payment app is what every person needs today to make purchases, transfer money to friends, pay for utilities, and so on. If you plan on investing in building a P2P payment service, provided that you do it right, you can expect a huge return on your investment.

The following stats show how the mobile payment ecosystem is growing and is impacting users’ day-to-day lives.

  • 64% of users prefer mobile payment apps to make online purchases.
  • Global mobile transaction market value is expected to reach $3.08 trillion by the year 2024.
  • Digital and mobile wallets form 29.3% of the total eCommerce transaction value in North America.
  • By the year 2023, 1.31 billion people will be using mobile payment applications.
  • 23% of consumers in the US prefer to pay with a mobile payment app.
  • Apple Pay is the most used mobile payment app in the US.
  • The number of Apple Pay users worldwide is 507 million.
  • The most used platform for mobile P2P payments in the US is Zelle.
  • According to research, 79% of global users have been using cashless payment methods through NFC POS terminals since the Covid-19 pandemic, and this contactless payments trend is expected to continue in the future.

These stats show the promising future of the mobile payment industry. 

Next, we will discuss what features a market-competitive mobile payment app should have in order to gain users’ trust and make big profits. 

This will give you an idea of what features to develop in order to deliver an outstanding app to the target user market.

Features to Develop for an App like Venmo

The primary features a mobile payment app like Venmo have are the following:

User Account:

A user account feature to help your app customers enter their personal information, update their financial credentials such as bank account and credit card details, choose currency options, etc.

PIN code Authentication:

A secure app experience is of the utmost importance when it comes to online payment applications. You should provide a secure app by integrating a two-factor authentication feature. This helps secure a user account even when the mobile device is locked.

Real-time Payments:

Users should be able to make instant payments. These payments can be made to some acquaintance or for a utility bill. Your real-time payment system must make money transfers convenient.

Bank Accounts and Credit cards Integration:

Your app should not make users rely on in-built digital wallets. They should be able to make direct bank-to-bank payments via their debit/credit cards.

Online Purchases:

Venmo has partnered with a number of online businesses. Users can shop on third-party sites using their payment app. You can develop a similar in-app feature to streamline users’ online shopping experience and make the whole process much quicker.

App Wallet Money Transfer:

This feature makes the P2P payment app more convenient for users. They are able to transfer money from their app accounts to banks and vice versa or transfer money to each other’s digital wallets.

Request Payment:

Users can request money from other app users. There is an in-app messaging and notification feature to update users and allow them to contact other app users.

Transaction Tracking:

This feature helps users track their payments and keep a record of their financial transaction history. You can also set up an emailing feature to notify users of their transaction progress.

Notification Alerts:

Instant notification feature used to notify users of payment processing updates i.e. when a payment is received or if there is a change in their in-app digital wallet.

Cryptocurrency Exchange:

Bitcoin is a hot selling point in today’s fintech market. You can provide an option to trade in Bitcoins or any altcoins through your app to attract more customers.

Share Purchase:

This is an interesting option offered by apps like Venmo that you can also integrate into your app. A shared payment option helps friends to split bills via their payment app.

Chatbot Assistant:

Your users may need instant help while using your app. Virtual assistance, i.e. a chatbot, helps answer users’ questions quickly.

Make your App Standout

There are lots of mobile payment apps available for users today. Your app should provide unique features to attract more users.

Venmo provides a handy social feed integration feature in its app. Users can use it to post updates regarding their ‘payment activities’, which will then be posted to their ‘friend’s feed’.

Features like this hit the right spot with users when it launched in 2009. The app attracted a lot of young users and was purchased by Braintree, a PayPal company, for $26.2 million.

To achieve similar market success, think of something your target user market would be interested in and integrate it into your app. 

The bottom line is that you need to implement a business model that aligns with your audience to ensure they rush to use your mobile payment app.

Build a Payment App

Now that you know what kind of app you want to develop, it is time to start the development work. 

Your payment application development process will include the following steps:

  1. Outline your requirements.
  2. Build your team.
  3. Choose your infrastructure and tech stacks.
  4. Pick your software development methodologies, i.e Agile, Scrum, etc.
  5. Design the mobile app user interface and front-end layout.
  6. Develop a Minimum Viable Product (MVP) including essential features of your payment app.
  7. Test MVP for bugs and errors. Also, ensure that the app meets decided functional requirements.
  8. Deploy your app in the user market and collect user feedback in the form of app store reviews.
  9. Make further improvements and enhancements in your MVP to meet user market expectations.
  10. Manage your product development lifecycle from design to release through an effective product development strategy. For example, agile development is deemed effective for managing an iterative mobile app development process.

We will now cover these points in more detail. 

Outline your App Requirements:

For the first step, map out your payment app specifications. Solidify your app idea so you can define your project requirements. Market research will help you to understand what features are in-demand and what features you should not waste time with.

Requirement gathering from customers and stakeholders will help you outline all the functional and technical requirements of your payment application. Write these into the form of a requirements document and you will be ready for the next step. 

Build your Payment App Development Team:

To implement all your desired functionalities, you will require a competent payment app development team. Your payment app development team should include:

  • UI/UX designers;
  • Android, iOS, or hybrid app developers according to your project requirements;
  • Specialized experts in skills such as blockchain, AI, ML, VR development, etc., where applicable. 
  • Mobile app testers;
  • Project manager.

Choose your Development Infrastructure:

You will need the infrastructure and tools to deploy and maintain your server-side code, and client-side application, for data storage, data processing, networking, etc. Investing in a cloud-based mobile backend as a service is a reliable option. 

The MBaaS will host your server code, provide you with a file management system, provide APIs to manage backend data, and enable secure communication between app users and servers. 

Moreover, your cloud-based MBaaS will free your developers from managing the backend infrastructure including hardware and OS maintenance. They will therefore be able to concentrate on developing the application.

A prominent example of a mobile backend as a service is AWS Amplify. Your developers will be able to efficiently create and manage scalable apps using this. The AWS-powered mobile backend seamlessly integrates into Android and iOS front-ends.

IBM Mobile Foundation and Microsoft Azure Mobile Apps are some other mBaaS options. These mBaaS providers also offer APIs to integrate with other app development frameworks, SDKs, and databases efficiently.

Select a Software Development Methodology:

Outline a software development methodology to be followed by your payment app development team. The most suitable approach to mobile payment app development is the Agile methodology. 

Agile development focuses on iterative development when building your software product. It starts with you developing essential features so you can launch an MVP to gain app users’ feedback and enhance the mobile app further.

The agile approach is used to manage app development among small cross-functional teams. The whole development project is broken down into weekly sprints to make it more easy and more adaptive to any changes.

Each developer is assigned daily tasks and is given a sense of responsibility for the outcome of the project, this helps build motivation and dedication.

The team’s performance and overall project progress are reviewed in daily standups and weekly scrum meetings. This helps managers to ensure maximum productivity. 

Read more about building a scrum payment app development team in our guide here.

Design App Interface and Front-end Layout:

Your mobile app design affects how a user interacts with your app. Ultimately, it is one of the key components that will decide whether your app is a success or not. 

Your developers should be skilled in designing an interactive and user-friendly UI including typography, theme, components placement, etc. 

The UX skills will help developers draw up an effective app design that improves the user experience via a great app interface.

To come up with different app designs quickly, developers should be skilled in using wireframing tools like JustinMind, which is used to build responsive prototypes for both mobile and web apps through built-in UI libraries, and Axure to design animations, flowcharts, and adaptive views, etc.

Develop a Minimum Viable Product:

It is always best to first build and release a Minimum viable product to the user market. An MVP reduces your app’s time-to-market. The longer time-to-market increases the likelihood that your app will lose market growth opportunities and fail.

To develop a mobile application, you have multiple options. Selection of development tech stack will depend on your app requirements and user market.

You will need to decide whether you want to create an iOS application or an Android application first. You also have an option to create a hybrid app to target both OS systems that allow you to reach a broad market of mobile users straight away.

We will now discuss the required skills for each of these app types and other technical expertise needed to build a market-competitive MVP.

Native App Development:

Native mobile apps are developed for a particular OS. They make use of device-specific hardware and operating systems. In this way, a native app is more optimized in terms of performance (particularly when it comes to iOS devices). 

The two most used operating systems for mobile devices are Android and iOS.

Android App Development:

If you wish to release your payment application into the Android user market, you will need to hire a native Android app developer. Your Android app developers should be experts in programming languages used for Android app development, these include Kotlin and Java.

They should also be familiar with Android development SDK and IDEs like Android Studio and Eclipse

The SDK provides all the software library components required for building an Android app efficiently. IDE provides necessary development tools like app simulator, debugger, etc., that make development easier for developers.

To design an Android app in accordance with the standards of Google Playstore, your developers should be experts in the Material Design Guidelines provided by Android.

iOS App Development:

To develop apps for devices running iOS like the iPhone, Mac, etc., you must invest in native iOS app developers. Your native iOS developers should be proficient in Swift programming language as it is officially recommended by Apple.

Swift has a fast learning curve and is compatible with Objective-C language, which was previously used for iOS app development. Moreover, a developer community is continuously improving the open-source Swift language for a better development experience.

iOS developers should be skilled in programming on IDEs like Xcode and Intellij AppCode for developing optimized apps efficiently. Your iOS developers should also be skilled in designing an app consistent with Apple interface and design standards. 

They should have knowledge about the Human Interface Guidelines provided by Apple to develop an intuitive app as per Apple’s standards.

Later on, if you wish to make your payment app available for a different mobile OS, you can do so by converting your native app from one OS to another. Read more in our guide on how to convert your Android app to iOS.

Hybrid App Development:

Hybrid apps are also known as cross-platform apps as they are not restricted to a specific operating system. They are deployed in a native app container that makes use of the relevant device OS and hardware.

This lowers development costs as you don’t need to build two apps and developers only require expertise in common web technologies like JavaScript, CSS, and HTML5 (provided your using a cloud platform to manage much of the backend requirements).

If you wish to access more than one mobile operating system with one code base, look for hybrid app developers. Your hybrid app developers should be skilled in frameworks like React Native, Ionic, or Flutter, etc.

React Native uses JavaScript, which is already known by huge numbers of software developers. It has an extensive library of ready-to-use software components that will make the payment app development process much faster.

Ionic helps in developing robust apps in combination with AngularJS, another commonly used web development framework.

Flutter is a rapidly evolving framework for cross-platform app development. It is highly compatible with operating systems like Android and iOS and offers features like hot reloading that enables developers to view app changes instantly while coding.

The use of flutter will require your developers to be proficient in Dart programming language which is a combination of Kotlin and Java programming languages.

API Integration:

You will need to add a number of features to your mobile payment app like payment gateways, ID verification, etc., through third-party services. For this purpose, your developers should be experts in efficient API integration.

They should be familiar with APIs like Synapse API to help with payment card issuance and compliance management, Dwolla API to help with activity management and connection with the US banking system, Stripe API for payment gateways, etc.

Your developers should also be skilled in API development using the REST API tech stack as it is the most commonly used API architecture. 

Your developers will require REST API knowledge to create or integrate a number of payment app features like, push notifications, transaction history, billing, etc.

Mobile App Security:

Your app developers should be able to provide foolproof app security. Mobile wallet apps are a major target of app hackers and cyber threats.

Your developers should be skilled experts in this industry for building secure payment apps that are in full compliance with PCI DSS. These standards are set by big finance companies like Visa, MasterCard, American Express, etc.

A PCI-compliant app ensures that users’ confidential data is secure. There are strong access control standards in place, which must be met.

Your development team should be able to implement secure data encryption, implement security features like unique ID/OTP (one-time password), biometric authorization, etc. to ensure app security.

Moreover, they should be experts in handling common cyber-attacks like Denial-of-service, phishing attacks, etc.

To implement such a secure payment app’s experience, your developers should be skilled in using SDKs like Firebase and Twilio. These platforms ensure only an encrypted data exchange among user applications.

Emerging Technologies:

Your payment application developers should possess expert-level knowledge of the latest technologies like blockchain and artificial intelligence if required.

They should be skilled in a blockchain technology stack like Kleynbank blockchain solution to implement secure transaction procedures for crypto-wallets for cryptocurrency exchanges, etc.

Artificial intelligence technology can be used in multiple ways in digital payment solutions. AI can help with personalized user app experiences, user data analytics, chatbot development, NFC (near-field communication) features, etc. 

AI can also help the development team with quality assurance. You can read more on this here.

This means your development team should know about big data handling and data preprocessing to enable your AI to be able to obtain useful insights from your data pools. 

To implement AI models, your developers should have a deep understanding of AI domains like natural language processing, computer vision, image processing, etc. They should be experts in ML model implementations through tools like Keras, Tensorflow, Google Vertex AI, etc.

These ML tools provide built-in libraries to construct neural networks and implement ML algorithms, without needing to code from scratch. They also help with data analytics and visualization to better understand your AI and ML models’ results.

Regulatory Compliance Knowledge:

Your development team should have a deep understanding of the financial regulations that must be met to build a regulation-compliant mobile app. Different regions in the world have different regulatory bodies and laws, your developer needs to be aware of the relevant ones. 

This is one example of why you must look for a developer who has previous experience in the industry you are building a product for. 

For instance, in the US, compliance laws depend on the state you want to release your app in, in the UK there is FCA (financial conduct authority) and PRA (Prudential Regulation Authority), and in European Union states, there is the ESMA (European Securities and Markets Authority). 

Test your Minimum Viable Product:

To ensure a successful market launch of your app, you must release a bug-free payment app. To do this, your developers should ensure the app is fulfilling all functional requirements and is performing according to your set standards.

Users are very quick to leave a bad review on an app store in the case of a bad user experience. You want to avoid this at all costs. There are numerous testing tools to help developers run tests to spot poor code and bugs.

For Android apps, your developers can run tests on platforms like Espresso to ensure app quality. Similarly, your iOS developers should be familiar with testing tools like XCTest.

Different automated testing tools, like Test IO, Appium, etc., can help you to perform effective quality assurance of your mobile app. These testing frameworks let developers run automated tests through features like parallel testing, exploratory testing, etc.

Cloud-based mobile app testing platforms, like Kobiton, are getting increasingly popular among developers due to the flexibility they add in running manual and automated tests.

After performing a comprehensive QA, you must be sure that your mobile app is compliant with industry standards and is ready to earn your brand positive reviews by running smoothly and providing a top-class user experience.

Now, you are ready to move to the next step, the app store release!

Release your App on the App store and Collect User Feedback:

During this stage, you have to focus on collecting user feedback. Encourage users to rate your app and leave reviews. Also, invest in gathering app usage statistics via paid tools.

You can use in-app feedback tools like Instabug to collect user reviews. You can send survey forms or app rating templates to help app users quickly rate your app.

All this app user data will help you with your next payment app development iteration.

Improve your App to Meet User Expectations:

Enhance your app features and improve the previous ones according to the data you have collected. Use tools to perform effective data analytics. Tools like Appbot will help you monitor and analyze user reviews and make future improvements.

Post Launch Maintenance:

Every mobile app needs maintenance to keep users happy and engaged. You will need software developers to work with you post-deployment to implement your maintenance plan and to continue to develop your app.

Your post-release app maintenance will include tasks like security patches, app code updates to keep up with mobile OS version updates, feature and UI enhancements, performance monitoring, app store optimization, etc. 

Final Thoughts on Payment App Development

Digital payment app development is a promising investment option for startup owners. The process, however, requires a critical understanding of the user market and expert-level skills to carry out the development process successfully.

DevTeam.Space has extensive experience in developing products for the Fintech market. If you are lacking any of the necessary skills then let us know about your requirements, and one of our technical managers will get in touch to discuss your issues and connect you with our expert app developers.

Top FAQs on Payment App Development

1. What are the different types of mobile payment apps?

Types of mobile payment platforms include:
Standalone services like PayPal,
Bank Centric like Zelle,
Social Media Centric like Google Pay,
For Mobile OS like Samsung Pay.

2. How can I earn from my payment app?

Monetization of your mobile payment app is possible through:
Charging transfer fees as an intermediary;
Running in-app advertisements;
A paid subscription to premium app features.

3. How to develop a money transfer app at a low cost?

To reduce development costs for your mobile payment app consider outsourcing to software development companies providing a complete product development cycle including design, deployment, and maintenance. In this way, you won’t have to look for other partners.


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