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6 Best Peer-to-Peer Mobile Payment Products

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In spring of 2015, Facebook launched a peer-to-peer mobile payments money transfer product through its Messenger app. With an average of 745 million active mobile users per day, Facebook is set to make sending money between friends even easier.

Need to know what your best peer-to-peer mobile payment options are? Here, we compare Facebook’s product to the other major offerings in this space. How do Google Wallet, Paypal, Snapcash, Square Cash and Venmo stack up?

Comparing Peer to Peer Mobile Payments in the US

Company Fees Delivery Limits Key Facts
Facebook None Transfer Occurs immediately and money is credited to your bank account in 1-3 business days Service available for Visa and Mastercard debit cards only; can only transfer money to Facebook friends; must have a Facebook account

Over 1 billion active users
Google Wallet No fees for transfers from bank accounts, debit cards or Google Wallet account; 2.9% transfer fee from credit cards

Money is received almost instantly when users send from Google Wallet balance or from a debit card; sending from a bank account cant take up to several days Must have a Google Wallet or a Gmail account to sent and receive money; $10,000 limit per transaction and $50,000 limit over a 5 day period Can send money as an attachment through Gmail or through the Google Wallet app
Paypal 2.9% fee + 30 cents for sending from a credit card or debit card Transfers to Paypal accounts happen immediately, transferring money to a bank account can take up to several days

$10,000 limit per transaction Ability to send mobile transfers internationally; owns Venmo, $180bn global dollars processed by Paypal in 2013
Snapcash None Delivers to recipient's bank account in 1 business day Same limits that apply to Square Cash Operated by Square Cash; 50% of users under the age of 18

Square Cash None Delivers to recipient's bank account in 1 business day Does not currently process payments with credit cards; only serves Visa and Mastercard debit cards; payments limited to $250 per week until user verifies identity, limit is $2,500 per week thereafter

No separate account required, also operate Snapcash
Venmo No fees for transfers from bank accounts, debit card or Venmo account; $3 transfer fee from credit cards and non-major debit cards Transfers to Venmo account are instant, transfers to bank accounts take 1 business day Transfers deposited to Venmo account, then have to be withdrawn; transfers limited to $300 per week until user verifies identity Owned by Paypal, includes social feed

Source: FXcompared research as of 16 Feb 2017


Facebook Messenger

The new payments feature rolling out on Facebook in the coming months will allow US users to send money over Messenger by linking their Visa or Mastercard debit card to their Facebook account. Fee free and apparently quite simple, users just type “$” in a message and then enter the amount to be sent to a friend. Messenger is available for Android and iOS for mobile and is also available on the Web.

Facebook has no need to rely on a separate online payments service, such as Paypal, having already built their own internal infrastructure to process payments for ads and games. By offering an in-app payment service, Facebook aims to make it unnecessary for users to close their app in order to make a peer-to-peer payment. This is similar to strategy behind Snapcash, Snapchat’s new in-app payments service (more detail below), but unlike Snapcash, Facebook doesn’t rely on an outside service to process its payments and handle customer service. This, in addition to the fact that Facebook has a larger and more demographically diverse user base, could really give the Messenger service an edge over the competition.

Facebook’s announcement doesn’t yet outline a plan for using credit cards or linking directly to a bank account, so we’ll have to see how the service evolves as it’s gradually introduced over the coming months.


Google Wallet

Google Wallet was first introduced as a service allowing US users to make purchases electronically at participating retailers. Google then made it possible for users to send money to anyone within the US with an email address and the Google Wallet app, which is available on Android, the Web, and iOS. Through the Google Wallet app, users can send and receive money to anyone in the US with an email address, as long as both sender and receiver have a Google Wallet account.

In 2013 Google added the option of sending money as an attachment through Gmail. With this option, funds are sent through a regular email: among the attachment options in a Gmail draft, you simply click the “$” option, choose which of your attached accounts or cards to draw from, and send the funds to another Gmail user. You can also send money directly through the Google Wallet app. However, you have to set up a Google Wallet account to access your received funds– as with Venmo (more below), the Google Wallet account serves the function of an escrow account.

There is no fee for sending money directly from a bank account, from a Google Wallet account balance, or from a debit card. Sending money from a credit card carries a 2.9% fee, with a minimum fee of 30 cents. Google’s limit per transaction is much higher than that of Venmo and Square Cash: you can send up to $10,000 per transaction and up to $50,000 in a five-day period.

Though Google’s peer-to-peer payments option is very simple and streamlined, the process of transferring funds from a Google Wallet account to a bank account can take up to several days.


PayPal

Paypal is one of the oldest and most established players in the online payments space, and, like Google, already has a large, established user base. This makes Paypal an easy and trusted option for many users looking to make mobile money transfers. Paypal allows users to send money directly from a checking account, from a PayPal account balance, or using credit and debit cards. Sending from a credit or debit card carries a fee of 2.9% plus $0.30 per transaction, and the sender has the option of deciding which party pays this fee. Like Google Wallet, all you need to send money is the recipient’s email address or phone number. PayPal also has a high limit for sending money: $10,000 per transaction.

Unlike any of the other peer-to-peer mobile money transfer services currently available in the US, Paypal allows users the ability to transfer funds internationally. Users can make a receive payments from 203 different countries and in 26 currencies, though international transactions are subject to different fees.

It can sometimes take multiple days to transfer funds from a Paypal account to a bank account, but the major benefit of PayPal is that it is a well-established and widely accepted as a form of payment, and with a PayPal MasterCard you can make nearly any purchase with your PayPal balance.


Snapcash

Snapchat, which allows users to send messages, videos, or photos that delete after a few seconds, has partnered with Square to allow its users to make payments through the app. Users can connect a Visa or MasterCard debit card to their account and send up to $250 per week and receive up to $1,000 per week (these numbers increase with time, use, and after proving one’s identity, as with other apps).

With Snapcash, there is no fee for transactions. Because it is powered by Square, Snapcash works like Square Cash (more below), but instead of using an email address and phone numbers, payments are made directly through the Snapchat app.

Snapcash is a relatively new service and, like all of the other mobile money transfer apps available in the US, is only available to users over the age of 18. According to Snapchat’s user statistics, 50% of the app’s users are between the ages of 13 and 17, meaning that only half of its current user base will be eligible to use the Snapcash feature, which could make the app less of a competitor when up against the more demographically diverse user base on Facebook.

Square Cash

Having already taken a significant position in the e-merchant space, Square is hoping for similar success in the mobile payments field with its Square Cash service. The app does not charge fees and allows users to link a debit card to their account. Square Cash users can also link directly to their bank account for fee free transactions. Unlike other services, Square Cash does not support credit card accounts. Square Cash works through email for both sending and receiving parties: you can either draft an email to the recipient with a dollar amount in the subject line and cc: cash@square.com, or else you can use the mobile app, available on both iOS and Android, to generate the email attachment for you.

The weekly limit for Square Cash transfers starts low, at $250, but can be increased once you attempt to transfer more than that amount in a given week. At that point, you’ll be prompted to link your account with a mobile phone number and Facebook account, or else you’ll have to verify your full name, the last four digits of your Social Security Number, and your date of birth. Then, the limit is raised to $2,500 per week.

Payments through Square Cash are deposited directly into the recipient’s bank account, rather than being held in an intermediary account, as they are with other mobile transfer services. This means that there is no need for Square cash users to set up an account– all you need to send or receive money is an email or phone number and a bank account or debit card, making for a fast, easy, and seamless user experience. The setup process required to send amounts over $250 is relatively easy and one time only. Most payments deliver to the recipient’s account in one business day and a small number of transactions post immediately.

Square Cash is currently completely free, with no hidden fees. The company has plans to eventually add paid premium features, such as the option to send money internationally via the app. Square Cash also operates Snapchat’s mobile money transfer feature, Snapcash, as discussed above.


Venmo

Venmo is a streamlined, simple to use mobile payments app that can be downloaded for free on Android and iOS. Though it initially limits transfers to $300 per week, that limit can be raised at any time if you verify your identity, either by providing the last four digits of your Social Security Number or by linking your Venmo account to your Facebook account. Users can both send and request money simply by inputting the person’s name, the dollar amount, and a brief description of the transaction (i.e., “Rent”). Users are able to receive money instantly through the app and transfers to bank accounts are processed within one business day.

There are no fees for sending money from a bank account, an approved Debit card, or your Venmo balance (essentially an escrow account for Venmo transactions). There is a 3% fee per payment, however, to link a credit card or a non-major debit card. About that Venmo balance: if someone pays you $30 for their half of a dinner you both shared, $30 is added to your Venmo balance. You can then transfer that money to your bank account, which takes one business day, or else keep it in Venmo and use it to make other peer-to-peer payments with the app.

Venmo is owned by Paypal, one of the oldest players in the digital payments space (see below for a review of Paypal’s mobile transfer services). Popular among the under 30 demographic in the US, Venmo also has a social component that lists every transaction in a feed with a description chosen by the user. The feed does not list dollar amounts, however, and users are able to opt out of the social share function if a greater level of privacy is desired. As the app’s user base has grown the company has taken steps to increase security and prevent the occurrence of fraud.

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