How To Build A Seamless Peer-to-Peer Payments App
While the hype around blockchain technology continues to rise, its full capacities have yet to be realized. The potential that these platforms have to globalize international payments are intriguing in developed countries, but for those that don’t already have a well-tuned financial engine, it is an awakening.
Peer-to-peer payments apps that utilize blockchain will take decentralization to the next level, sidestepping traditional remittance services and opening up finance to vulnerable populations. The rural poor will have an option to send money to friends and family that they can afford, and mobile devices will allow this adoption to skyrocket.
The change will happen quickly, and the lack of other infrastructure will propel instead of hinder it. Mobile towers and devices are the first waves of technology that will be available to these areas. The ability to have a signal without wiring bringing it all the way to your home is a crucial advantage.
Peer-to-peer platforms would be able to finish transactions faster than even cryptocurrencies like Bitcoin or Ethereum and have lower fees while they did it. The necessity for charging fees won’t be a matter of paying intermediaries but a small cost to justify the service.
These transactions will both quick and secure. A proprietary token system built into the platform would eliminate latency issues. There would continue to be risks associated with securing private keys and handling crypto wallets, but this will be true of any system. Any solution will be forced to place some of the responsibility of the users, who would be the ones in charge of the critical security keys.
Users will be able to initiate transactions to each other, and the only intermediaries necessary would be companies at each end that convert tokens to fiat currencies and back. Building trust with users can be accomplished by developing a strong user experience. The UI/UX team would go a long way towards securing the system, too, with them funnelling users towards making safer actions. The experience would also help prompt users to continue storing much of their wealth on the platform, only exchanging them for fiat currencies when necessary.
Putting it all together
Creating an app that can do all of these things will mean a lot of different technologies coming together. The way that the app will work will be that the user requests a point of sale. They will request to swap their fiat currency into the app’s native tokens.
Next, both the issuer and receiver will get a response with the status of the transaction from the app. Here, either the backend blockchain system will be successful or fail to generate the transaction and send a message back, either way, alerting both parties to this status. When it goes through, the transaction is accepted and shifts to being in progress.
This is where the blockchain will start processing the request. Coins will be transferred from the sender’s wallet into the blockchain. From there, the coins can transfer anywhere within the blockchain system. They can go back and forth between the sender and receiver, move multiple times, or whatever else is required. Once the coins reach their final destination, both parties get another update about the status of the transfer, telling them if it was successful or not.
This system will have two primary components. It will have its own backend system supported by a top layer of blockchain. The solid backend would be responsible for handling all the transitions that aren’t best suited for blockchain. This includes ordering fiat currencies to be exchanged, communicating between the point of sale and the app, and communicating between the client and the service.
The blockchain will be focused on mobile transactions. Doing what it does best, the layer would enable scalable mobile transactions that remain lightning quick. By using this hybrid system, the app would be able to handle virtually any number of users. It would be responsible for transferring coins between users and their bank and directing transactions that transfer assets between users.
An app that functioned like this would be based on traditional IT architecture, eliminating the need for special upgrades to remain efficient. This ensures scalability, better data dispersion, and ownership for the customers. The end result would be that the three or four third parties that are now required to transfer these funds could be cut out of the system, saving users money on fees.
Users will be able to transfer tokens from wallet to wallet with security and ease. The app would be able to support other coins, but these would come with higher fees to run the transfers. A central database would be kept of all of these transactions where they would be traceable, allowing users to verify their transaction histories.