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How to create a mobile payment app: popular features and major challenges

Anastasia Osypenko
Market Researcher

Mobile payments are already a worldwide cultural norm. People don’t carry cash or make cash transactions as often as once before. According to McKinsey research, cash payments massively decreased, and the number of consumers who prefer to make digital payments continues to grow. As of 2020, 79% used payment apps monthly and 44% weekly. 

In fact, the payments and transactions category is the most funded sector in fintech, and the global peer-to-peer payment app market is worth an estimated $336 billion in 2021. It’s a fast-growing industry that corresponds to users’ evolving needs for hassle-free and easy to track mobile transactions.

At MadAppGang, we’ve been developing secure fintech solutions for more than a decade. We know what it takes to build trustworthy apps that handle a high volume of transactions, and are compliant with all regulations. 

In this article, we’ll discuss how to create mobile payment apps, some of the common features, and a few of the biggest development challenges.

Applications of payment apps

Payment apps facilitate easier digital payments in several ways:

  • Online purchases. Payment platforms like PayPal allow users to make purchases on the internet in a single click. Even though credit cards remain the most popular payment method, ecommerce businesses need to offer other options. By integrating a payment gateway that supports both credit cards and electronic payment methods, retailers have a higher chance of convenient and safe transactions. Large retailers even enter the payment solution market themselves; Amazon, for example, launched Amazon Pay to allow customers to use their Amazon account to make purchases from third parties. 
  • In-store purchases. Offline cashless and cardless transactions are increasingly popular: in 2019, 30% of consumers worldwide preferred mobile wallets to cards, and recent years have only solidified the trend. Apps for paying online can also cover contactless offline purchases. 
  • Peer-to-peer (P2P) money exchange. P2P apps make it easier for friends and groups to send funds to one another. In a 2020 US survey, 44% of respondents said they used P2P payment platforms. Venmo, a P2P payment app has a 40-million strong user base, which illustrates the increased demand for these apps.

Many applications combine these features, allowing users to make offline and online payments, and lend money to peers. When creating a mobile payment app, you can focus on a specific functionality if it makes sense for your target users, but more often than not, it’s helpful to include online, offline, and P2P capabilities. 

Digital wallet apps are another area worth exploring, but several key players in smartphone manufacturing hold a monopoly. The only payment wallet-type apps that can compete with Apple Pay and Google Pay are those designed for a country-specific audience, such as Alipay in China.

Features of a payment app

Let’s examine the most in-demand features in mobile payment software.

Secure login

On top of email and password login, you can provide biometric authentication methods such as fingerprint or facial recognition. It’s also good practice to offer multi-factor authorisation in any financial app.

User profile and account management

App users should be given opportunities to add or remove multiple bank accounts, set notification preferences, upload a profile picture, invite friends, and perform other actions related to their accounts (setting payment limits, enabling or disabling automatic currency conversion, and so on).

Example of adding a payment card to a Cash account

Adding a payment card to a Cash account. Source: Cash

Sending and receiving payments

Money transfers are key to financial apps, so they should be easy to perform. For P2P payments, an app should integrate user contacts, offer several ways to search for a recipient, and show suggested contacts. 


Searching for a money transfer recipient in the Zelle app. Source: Zelle

It’s also a good idea to allow users to send money to unregistered users via the app. When those users receive an SMS or email transfer notification, they can then register and accept the transaction.

Emailed money transfer notification from Zelle

An emailed money transfer notification from Zelle to an unregistered user. Source: Business Insider

Popular electronic payment apps incorporate additional features that facilitate easier payment requests. For instance, Venmo designed individual QR code generation, and Cash added a shareable identifier for individuals and businesses ($Cashtag).

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Sources: Venmo, Android Police

Crypto payments

On top of national currencies, many popular payment apps allow users to make crypto transactions. Over 300 million people hold cryptocurrencies worldwide, so this functionality is definitely worth considering. The most popular payment apps in the US, PayPal and Venmo, embrace cryptocurrencies, allowing customers to buy as little as $1 worth.

Point-of-Sale (POS) integrations

Your app can allow merchants to accept payments through their POS systems. It’s especially helpful when both the POS system and the payment app have a QR code scanning feature so customers can make touch-free purchases.

Touch-free in-store payment through a POS system and Venmo app

Touch-free in-store payment through a POS system and Venmo app. Source: Business Wire

Transaction history

Convenience and transaction transparency are among the most appreciated features in fintech. When creating a payment app, it’s crucial to design a simple and informative payment history section with the possibility to view details, generate electronic receipts, and send them to in-app friends or via email.

Splitting bills

Since Splitwise, a bill-splitting software pioneer, launched in 2011, its users have managed over $90 billion worth of expenses. Shared trips, meals, rent, or expenses are common among different generations of users, and having automatic bill-splitting and a transparent record of who owes what to whom is convenient.


Reward programs and cashback options are a great way to attract users. Pew survey respondents pinpointed rewards and discounts as among the major benefits of mobile payments.

For example, the Cash payment app features the Boost bonus system that provides customers with special offers:

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Budget analysis

Payments apps that cover different needs in one place attract a larger pool of users. A 2017 Citibank study revealed that the majority of users are likely to stay loyal to financial apps that have over five helpful features. Given that expense trackers are among the fastest-growing finance apps, it makes sense to integrate spending insights into a payment app. The fact that many banking and payment apps integrate similar functionality (or buy a separate expense tracker as Capital One did with Level Money) only supports the idea.

Social features

In the market of P2P apps, financial features are connected to social ones. Venmo’s popularity is primarily based on its social media-esque nature. The app allows and encourages users to add friends, post about their expenses to the feed, and express themselves in payment notes.

Social feed in the Venmo app

Social feed in the Venmo app. Source: Venmo

If you’re targeting a young generation, don’t underestimate social features. Consider adding interactive notes, emojis, and a newsfeed. 

Even social media platforms themselves are integrating payment capabilities. For example, Facebook Pay is available in dozens of countries and lets app users send money to friends from Facebook or Instagram’s messengers. As people in regular contact with each other often split payments and exchange money, this functionality is beneficial to users. WhatsApp has recently integrated mobile payments for Indian users, and we expect more social apps to enter the territory of P2P payments and broader financial operations.


It’s crucial for any fintech app to send real-time notifications about successful or unsuccessful transactions, scheduled payments, and other account activities. Users should be able to manage the notifications they receive, opt out, or set automatic emails duplicating notification messages. 

To estimate the resources needed to develop any of these features, check out our guide to the cost of banking app development, and our post on how mobile app development costs are calculated.

The major challenges of payment app development

We’ve explored some of the must-have and additional features to consider when creating an app for P2P payments or other financial operations. But functionality alone doesn’t make for a helpful fintech product — it’s the combination of development and design efforts, as well as a solid approach to protection and data security. In addition to the essential features, let’s take a look at your other major considerations when making a payment application.

Ease of use

Convenience tops the list of reasons why people use digital payments, so it comes as no surprise that the more user-friendly a mobile payment app, the more loyal its users.

Top reasons people use digital payment methods

Fintech apps manage to attract millions of users if they have a simple, uncluttered design where each element has a clearly understandable purpose. As we can see from Venmo and other examples that merge social media and personal finances, it’s also helpful to make a payment app fun. If you’re not up to competing with social feeds or designing one for your product, consider adding the possibility to share payment notes with emojis or incorporating an attractive rewards program.


Security is the primary concern with money transfer apps. Given that hacking attacks and breaches are still eating away at financial services, you should adopt the best security practices to avoid preventable vulnerabilities. NowSecure’s recent review of money transfer apps revealed that 40 out of 42 showcased serious security issues:

Mobile app benchmark summary

Source: Yahoo! Finance

Multi-factor or biometric authorisation increases an app’s access security, but it’s also needed to adopt other important security measures. At MadAppGang, we built the financial app WebMoney and protected it from hacking, MITM, and DNS attacks with data encryption, certificate pinning, and a custom DNS server. We also ensured the app was automatically blocked on jailbroken devices. 

Providing users with convenient ways to contact customer support is also required. Support and assistance is needed anyway for standard issues, but when it comes to hacks, it’s of prime importance. Square’s Cash app lost many loyal customers because of unauthorised transactions and an inability to get in touch to resolve the issue.

To sum up

Consumer behaviour is shifting towards digital and primarily mobile payments, and the demand for money apps is higher than ever. If you’re up to creating a money transfer app, learn what features already work for competitors and what functionalities your target users expect to have at their disposal. 

To make a payment app that will attract a growing user base, you need to ensure it’s reliable and fun. Trust your projects to a development and design team who know the ropes of the fintech market — drop us a line and we’ll discuss what it will take to create a highly secure and user-friendly payment app.