What are P2P payments?

P2P payments, also sometimes referred to as peer-to-peer payments or person-to-person payments, are a convenient way to transfer funds to another person using your smartphone or another internet-connected device. 

If you’ve ever sent money to a friend or family member using Zelle® or PayPal®, you’ve completed a P2P payment.

Keep reading to learn how P2P payments work as well as safety precautions to consider.

Key takeaways

  • P2P payment providers allow you to send and receive payments using your mobile device.

  • Payments made using a P2P payment option are often encrypted to help protect users’ personal information.

  • P2P payments linked to a bank account are generally free, while P2P transactions made with a credit card may incur a fee.

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How do P2P payments work?

P2P payments generally involve the use of a third-party mobile app that users download to their phone or other mobile device. Once they’ve created their account, users can link a bank account, or a payment method such as a credit card or debit card, to send and receive money from other users who also have an account on that same P2P payment platform.

When sending or requesting payment from another user in the P2P payment app, you typically search for your contact using their name, email address or phone number. In some cases, you may also be able to complete a P2P transfer using a QR code generated by the app.

Depending on which P2P payment app you use, the money might be automatically transferred to another user’s bank account when you send a payment. Or the money might stay in the P2P payment account until the user opts to transfer it to their external account.

What can you use P2P payments for?

While most P2P services are primarily used to transfer money between individuals, some can also be used to pay for services as well. PayPal, for example, is a digital wallet that allows P2P payments but is also commonly used for online purchases or even to pay bills.

Below are a few other scenarios where you might use a P2P payment service.

  • To split a bill: P2P apps make it easier to split restaurant checks, divide rent payments among roommates or reimburse a friend for your portion of travel expenses.

  • To crowdfund: Apps like PayPal make it easier to donate to a good cause or start your own fundraiser.

  • To accept payment: If you sell things at an in-person or online marketplace and don’t want to limit your payment options to cash, credit cards or debit cards, P2P apps can make it possible to accept digital payments.

  • To keep card details private: If you’re worried about privacy online or just don’t want to enter your actual card number each time you shop, you might opt to use a P2P payment service at checkout.

Popular P2P payment providers

There are many different P2P payment apps on the market. Each one has slightly different rules for what payment options it allows and how to send and receive money transfers. Here is a brief overview of five popular P2P payment services:


If you use a mobile banking app, chances are you already have access to this digital payment service. Zelle® is available in the mobile banking apps of more than 2,100 financial institutions and is free in our top-rated Capital One Mobile app. Even if you bank somewhere different than your friends and family do, you can still use Zelle® to send and receive money. With Zelle®, there’s no need to wait—you can receive money fast directly to your U.S. bank account when both users are already enrolled.


PayPal is a popular digital wallet that can be used for all sorts of financial transactions, including P2P payments. PayPal users can send payments to one another by using an email address, scanning a QR code or generating a PayPal.Me link that allows the other user to click and send payment directly. 

When you receive a payment through PayPal, you’ll get a notice letting you know the money has been sent to you. You can then choose between transferring the money to your bank account or, for future PayPal payments, keeping the funds saved in your PayPal account.

Domestic P2P payments are free if you’re sending funds using your bank account or PayPal balance, but P2P payments made using a credit card may incur a fee.


Venmo, which is owned by PayPal, is another P2P payment app that makes it easier to pay friends or split payments for things like rent and utilities. And also like PayPal, Venmo is free to use when sending or receiving money to your bank account or Venmo account, but users may pay a fee to send money using a linked credit or debit card.

Cash App

Cash App bills itself as a financial services platform that allows users to exchange money, stocks and even bitcoin with one another. Sending and receiving payments is free for both domestic and international payments, and users can make transactions using their phone number, email address, a QR code or a unique identifier URL known as a $Cashtag.

Google Pay™

With Google Pay™, users can link a bank account, credit card or PayPal account to send and receive money from other users. It also gives users the option to split a bill with multiple people by creating a group and entering the full bill amount. Google Pay will then split the bill evenly or allow you to adjust totals for each person before sending a payment request to each person in the group.

Are P2P payments safe?

Like a lot of digital payment methods, P2P payments use encryption to keep your account information private. But that doesn’t mean they’re completely risk-free. While it can be easy to send money from your P2P account, it’s not always easy or even possible to cancel or reverse the transaction if you realize you sent money to the wrong person.

Taking the following precautions can help ensure you’re using P2P payments as safely as possible.

  • Only send money to users you know and trust: Most of the P2P payments you make will be to people already in your contacts list, but it may be helpful to double-check that you’re sending it to the right person.

  • Don’t accept payments you weren’t expecting: Scammers may pretend to accidentally send you money and then ask for it back. But in many cases, the payment originally sent to you was made using a stolen card or other fraudulent account information. In those cases, the money may never actually credit to your account and you’ll be out the money you sent back.

  • Beware of phishing schemes: Never share your personal information, including your password, with anyone claiming to work for a mobile payment app. Scammers may try to trick you into thinking your account has been compromised and use this information to access your account.

  • Add multifactor authentication to your account: Multifactor authentication is an optional security step you can add to verify your identity when you log in to your account. The authentication often comes in the form of a code sent to the mobile number or email address linked to your account and may help prevent someone from accessing your account even if they have your password. 

How to use P2P payments with Capital One

It’s easy to send and receive P2P payments from your Capital One bank account. One of the simpler and more convenient ways is to sign in to the Capital One mobile app and access Zelle® for free.

You can also add your Capital One credit or debit card to PayPal or link your card to Google Pay.

P2P payments in a nutshell

P2P payments can be an easy way to send money to friends and family without using a card or cash. Sending and receiving money is generally fast and free with helpful security features, though it’s important to exercise the same caution you’d use with any mobile payment app.

If you’re looking for a convenient way to send money for free, download the Capital One mobile app and get started with Zelle® today.

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