Best P2P Money Transfer Solutions

Which Should You Use and How

Today, I uncover all the options available for P2P money transfers and show you what could well be a great option for you.

But that’s not allMoney Transfers Peer to Peer

In some cases P2P services may not be the best option at all but it is good to know what is!


  • Can be super convenient
  • Can be super cheap
  • Fast depending on service and amounts


  • Limited to smaller amounts
  • Scam potential

When you want to pay your rent, split the bill at restaurant or get some money overseas it doesn’t make sense that you have to run off to the ATM or get charged and arm and a leg for the service.

3 Best P2P Money Transfer Options

Click to skip to info below.

  1. Apps and websites for sending money – perfect for paying or receiving money with family and friends
  2. International Money Transfer Services – perfect for international transfers of larger amounts (but less than $7000)
  3. Bitcoin and cryptothe future or the best now?

The solution in many cases is this new breed of internet based money transfer solutions known as peer-to-peer (P2P).

The peer-to-peer (P2P) term is a slight misnomer though. That is because it creates the impression that the solutions work without trusted central control points. However, all of the P2P money transfer solutions coming to the market have trusted middle persons to replace the bank.

Why this is important

P2P Reliance on PeersThere is hardly any money transfer solution that is completely peer-to-peer. The best way you should look at it is that they are all on a spectrum that extends from the most to the least P2P.

Those that are on the most P2P end serve as marketplaces that connect and facilitate users to directly exchange currency amongst themselves. Meanwhile, those that are on the least P2P end take and extend the currency as a trusted middle person.

This can be a really good in terms of providing a service that works well and has some extra security built-in, but this does come at a price.

What exactly defines a P2P money transfer solution?

The main feature of P2P money transfer solutions is that they operate on the internet; either through mobile applications or website portals. Also important, they function without physical agents, the kind Western Union and MoneyGram have. Instead the website or mobile application serves the primary point of service.

Most of them are designed to help you bypass banks, although this is not always possible or desirable.

What are P2P money transfer solutions great for?

  • Sending small amounts of money from one point (including yourself) or user to another.
  • Spending money online privately and securely
  • Turning your mobile phone into a wallet

Indeed, P2P solutions can provide you with the ability to do a lot of things better.

With so many options, which is the best P2P money transfer solution?

This mostly depends on what you want to do and where P2P seems to be most useful.

3 Best P2P Solutions

Click to skip to info below.

  1. Apps and websites for sending money – perfect for paying or receiving money from family and friends fast and easily
  2. International Money Transfer Services – perfect international transfers for larger amounts (but less than $7000)
  3. Bitcoin and crypto – the future or the best now?

1. Apps

Whether you need to send rent money to your roommate, split a bill, or ask your friend to pay you back (without actually asking) – apps can be a cheap, convenient way to go.

Some support international transfers and can be used as a digital wallet to pay for your groceries and services that accept them.

The most used P2P payment solutions in this category are PayPal, Venmo, Square Cash, Google Pay, Zelle and Apple Pay.

You might also like Venmo International transfers because Venmo is limited to transfers between Venmo account holders and not designed for international transfers in different currencies.

Download through Google Play or iTunes.

In this regard let’s have a look at PayPal and Venmo, which have some of the highest numbers of users; 250 million and 22 million respectively. Square Cash also enables you to use Bitcoin as well as being a great rival for the other two.

VenmoPayPalSquare Cash
Payment MethodsCredit, debit, bank transferCredit, debit, bank transferCredit, debit cards
Credit Fee3%2.9% + $0.303%
Debit FeeFree (25 cents for instant transfers)2.9% + $0.30Free
Bank Transfer FeeFreeFreeCredit and debit cards only
Speed to Transactup to 30 min5 min - Practically Instantaneous (PayPal to PayPal)Practically Instantaneous
Transfer Limits$3,000$10,000$2,500

6 Most Important Things You Need to Know

  1. Convenience
  2. Cost
  3. Speed
  4. Security
  5. Scams
  6. Customer support

1.1 Convenience

Forget about running off to the ATM to get cash or waiting days for your bank to send the money over. The reason Apps like PayPal and Venmo are growing like crazy is you can can pay someone really easily and quickly.  The mobile apps take digital payment of friends and family to the next level. Of course, they don’t work so well if you out in the middle of the desert and don’t have the internet. But then again who needs internet when you are in the desert? Enjoy the cactus dude!

With PayPal the person your sending money to will also need a PayPal account. To pay them or ask for payment it is as easy as having their email associated with the PayPal account.

For Venmo, it links in with Facebook enabling you to add “Venmo friends” easily but you can also add them if they are not on Facebook.

Squarecash has the additional function of being able to pay someone who does not have an account.

Here’s how PayPal, Venmo and Square Cash work.

1.2 Cost

If you are transferring money in your local currency costs are generally pretty low. For example, with Venmo it is free to pay people from your checking or debit card and 3% from your Credit Card. For PayPal it costs 2.9% + $0.30 from you debit card and credit card.

PayPal has the added advantage that you can pay someone overseas and it is relatively cheap for small amounts. However the unfavourable exchange rates and fees mean that costs become relatively expensive above $300.

1.3 Speed 

All appear to offer great speed as money sent through it looks like it is received practically instantaneously.

However for the receiver to access the cash, Venmo also has the option to pay 25c and Square Cash offer the option for the your recipient to pay 1% to receive the money for use. PayPal takes a up to 5 minutes but the money is available to the receivers PayPal account.

Part of the reason for not making the cash available instantaneously is partly related to security, enabling you to reverse fraudulent transfers.

1.4 Security

All services take security very seriously and have plenty of measures to try and minimize problems.

However, the reality of turning your phone into a wallet means that if someone has your phone, or they hack into your email address – they could possibly access your wallet. To counteract this, your email and phone security becomes more important.

1.5 Scams

A bigger issue is where scams are involved. Scammers have figured out that the can make it look like you got paid, then reverse the transaction after they have your goods. Golden Rule: Paying people you trust like friends and family is fine but avoid paying people you don’t know.

1.6 Customer Support

The one area that PayPal, Venmo and Squarecash seem to be struggling in is customer support. These low cost services work really well for smaller amounts when nothing goes wrong, but occasionally (for security reasons usually) users can experience frozen accounts or funds, which understandably can be frustrating.

2. International Money Transfer Services

This category of P2P transfer services major strength is making it cheaper to convert between currencies and transfer money internationally.

While PayPal might be a good choice for convenience for small amounts (less than $300 USD) internationally, this group of P2P providers will almost always be cheaper.

Here we look at:

  1. Convenience
  2. Limitations
  3. Alternatives

If you use a bank to convert your currency, the exchange rate they offer you is different to the interbank exchange rate. This also applies if you send cash with a remittance service like Western Union, MoneyGram or Ria where the receiver gets funds (often cash) in a different currency. This is because the service provider adds a significant mark up on the exchange rate. That said, we found that newer services like as WorldRemit and Remitly are providing far lower cost ways to sending cash.

You might also like 7 Cheaper Ways to Transfer Money Internationally.

2.1 Convenience

P2P money transfer solutions seek to offer customers competitive exchange rates. They do this by charging relatively small and transparent fees to connect matching buyers and sellers of different currencies.

At their simplest they are just a marketplace facilitating P2P selling and buying of different currencies.

For example, if Mary has US dollars and wants Sterling Pounds and John has British Pounds and wants US dollars, they can meet on this platform and exchange the currencies using the prevailing market exchange rate. And the marketplace will charge them usually a percentage on the amount plus a small fixed fee.

In reality all this is done anonymously and with pools of funds.

Money transfer solutions such as this, reduce the cost for users by avoiding cross border movement of money.

The most largest and most popular solutions in this category are CurrencyFair and Wise for good reason.

You might also like:Transferwise V Currencyfair

2.2 Limitations

Setting up your account will usually take a few extra steps compared to an App, so these services can meet international and local regulations.

Also since they rely on a market being made, or finding matching trades, this means costs can tend to rise as the amount get larger, and it might take longer to have your transaction completed especially if the amount you seek is significant (usually above the $7000 USD).

2.3 Alternatives

Above $7000 and we recommend a Money Transfer Company like OFX money transfers, WorldFirst or TorFX money transfers which all have their own strengths but most notably – they do not rely on P2P markets.


Review of OFXImportantly these services tend to have better support for dealing with different banks in different countries. They are also are also able to guide you better when setting up your account which becomes more involved to meet regulations as the amounts increase.

Cost wise they also tend to get cheaper as the amounts increase whereas P2P providers tend to become more expensive because they may have to jump in to complete the deal.

3. Bitcoin and crypto

This maybe the perfect option for you if the sending and receiving parties are happy to use the exchanges that are necessary.

3.1 How it works

As you may know, cryptocurrencies like Bitcoin use blockchain technology. The services are digital tokens on a shared ledger known as blockchain (wikipedia). The entire service, in the majority of cases, is maintained by a community of users through consensus.

Money Transfer with Bitcoin or other Crypto

For being managed by communities of users through consensus, cryptocurrencies could be considered the most P2P. But they too have centralized points in the form of exchanges, miners (those who maintain the ledger) and wallet service providers.

The solutions in this category include Bitcoin, Ether, Monero and Litecoin. There are over 1000 other blockchain based P2P money transfer solutions. The cryptos, as they are also known, offer speed, privacy, low cost and a break from banks.

Crypto however, at this point in time have several inherent weaknesses that work against them. The biggest of which is adoption.

For example, if the person you wanted to transfer money to was happy to accept Bitcoin too you can use an exchange like CoinBase to send them Bitcoin.

3.2 How to do it

Transfer Bitcoin to Someone Else with CoinBase:

  1. Get your recipients email address or Bitcoin address. (The receiving parties Bitcoin address is inside their BTC wallet – simply tap the QR code)
  2. Click the Accounts button at the bottom
  3. Tap your BTC Wallet
  4. Tap the small “send” arrow in the top-right corner
  5. Choose how much you want to send
  6. Hit send.

Of course this only works if the receiver wants Bitcoin (or other Crypto) and even if they do the whole system relies on exchanges which tends to make the process inconvenient – for now anyway.

Bottom Line

Anybody with a needs to move money from one point to another should have a good look at P2P services if they want to do things quicker, cheaper and easier.

The Apps turn your phone into a powerful wallet for smaller transfers to others both domestically and internationally. Not many enable you to do international transfers with the standout being PayPal which tends to be costly above $300.

For domestic transfers, the Apps can still be a good option for larger amounts but they too have limits on the amounts you can send.

P2P services for international transfer up to $7000 are a good option, but after that the non-P2P services are better bets.

In the future, when everyone has Bitcoin or some other crypto currency, there will be no need for exchange rates and fees will also be negligible.