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January 17, 2023

Mobile Payment App Development: All-in-One Guide

January 17, 2023
Read 10 min

As the world becomes more and more digital, the demand for P2P payment systems continues to grow. This isn’t surprising, as payment apps speed up and simplify transactions and provide users with access to a range of financial tools and services without having to go to the bank. In addition, P2P payment apps can also be useful when a customer from an unbanked segment needs access to financial services. All this together makes transacting much more convenient and faster.

According to statistics, the volume of mobile payment transactions has reached $1.7 billion in 2021, which accounts for a 27% annual increase. The number of users willing to use payment apps continues to grow, opening up many opportunities for new players to enter the market.

That’s why both startups and established financial institutions are now actively investing in mobile payment app development. By 2030, the global P2P payments market is expected to reach $9,097 billion, with a CAGR of 17.3%, making payment app development an attractive business niche for startups and SMEs. In turn, large financial institutions are investing in payment app development to initiate digital transformation, move away from offline services, attract more customers, and reduce staff costs while generating more revenue.

Have an idea for a payment app? Read on to learn more about the types of payment apps, how they work, what it takes to develop your own solution, and what features it should have to win user loyalty.

mobile payment app development

What is a Payment App?

Simply put, a payment app allows users to use their smartphones to make online purchases, transfer money to other users, pay bills, and more. Some apps also enable crypto transactions. The availability of most financial operations in a single place makes payment apps an effective and popular tool for handling daily finances.

Types of Payments Apps

There are different types of payment apps. So, if you’re thinking about creating your own app, you should define your business goals and the needs of your target audience and choose the type of app that meets those requirements. Payment apps can be divided into different types, each with its own features.

Banking apps

To stay ahead of the curve, more and more banks opt to develop their own payment apps. With such apps, banks can grow their customer base, generate more revenue by cross-selling financial products, increase user reach and engagement, and improve the user experience.

Independent service providers

With the development of the fintech sector, non-bank financial service providers are also actively developing their own apps. These are often presented by startups that want to innovate with solutions like Paypal or Venmo and offer services that aren’t available in existing apps. 

Digital Wallets

Digital wallets often combine payment functionality with advanced features such as analytics and personal finance assistance, trading functionality, crypto asset management, and so on. With the fintech industry full speed ahead, the interest in digital wallet development is constantly growing.

Messenger platforms

Big players like Whatsapp or Telegram have picked up on the trend and are now investing in online payment transfer app development. Now their customers can make transfers and some other operations directly through the apps. The development of the payment app has already proven to be a success for Whatsapp in India and Brazil – next up is the US.

How Do Payment Apps Work?

The way mobile payment apps work depends on the type of app. For example, in P2P payment apps, users transfer money directly from their bank accounts to individuals. To enable offline purchases in stores, payment apps should be equipped with appropriate delivery technology such as NFC, Bluetooth, QR, and others.

What the different types of payment apps have in common is that they’re all designed to facilitate financial routines. To this end, users should be able to complete their transactions with a few taps of their fingers. After downloading the app, users need to sign up and pass the KYC check. After that, they connect their bank accounts and cards to the app’s accounts and they’re ready to go – from now on, they have access to financial services right in their pocket.

Applications of Payment Apps

Payment apps have become a part of our lives; they can be considered so-called bridges that make online transactions and purchases easier and faster. In short, there are three common tasks that can be done with payment apps.

Online purchases

Even though cards remain the most popular payment option, e-commerce companies are eager to offer their customers as many payment options as possible. This is where payment apps come in, allowing people to make purchases on the internet with a single click.

In-store purchases

Offline cashless and cardless transactions have become the most popular payment method for billions of people around the world. Apps for online payments can also have an offline contactless payment feature.

✅ P2P (peer-to-peer) money transfers

P2P solutions are aimed at simplifying transactions between private individuals. There is strong demand for such apps – Venmo, a P2P payment solution, has 40 million users, for example.

Most payment apps combine these features. Of course, you can focus on a single payment method, depending on your goals and target audience. However, it’s advisable to implement online, offline, and P2P payment options.

5 Steps to Follow to Develop a Payment App

Now that we’ve explained the basics of payment apps and looked at how they can be useful for you and your business, let’s take a look at the most important steps you need to take to develop a payment app.

Step 1: Select the type of app and decide on the platforms

As mentioned earlier, there can be different types of apps. So before you start developing an app, you need to decide what type of payment app you want to create and what platform you choose. What are the results of your market research? Who is your target audience and what are their needs and painpoints? What do your users want to see? When you answer these questions in detail, you’ll get a clearer picture of the end result. A good option is to approach a fintech software development company to conduct a discovery phase where specialists gather information on similar solutions, specify requirements, determine the scope of work, review assumptions, design the solution architecture, define the product roadmap, and accurately estimate development time and costs.

Step 2: Decide on the feature set

To gain the loyalty of users, your app should deliver value. To this end, it’s important to carefully define the features, taking into account the real-life situations in which users will use your app. If you know what tasks users need to do, you can design the app’s features so that users can complete those tasks quickly, efficiently, and without additional effort. Of course, there are basic features that are common to all apps, but there is still a lot of room for creativity.

Step 3: Consider legal and security issues

Since financial apps handle a lot of sensitive information, you need to take data security seriously. Best practices include encryption, multi-factor authentication, and secure and authorized third-party providers.

Another important point to consider is the legal requirements for payment apps in your target market – to work efficiently, you need to make sure your app is compliant with these requirements. To speed up the time to market without compromising the app quality, it would be helpful to hire a legal advisor.

Step 4: Pick the appropriate tech stack

The point is that you should find a balance between app performance, maintainability, and payment app development cost. If you need help choosing appropriate technologies for your project, contact us – we’ll be happy to contribute our expertise and help you select the most suitable technologies based on your requirements and goals.

Step 5: Consider the user experience

When developing a custom payment app, it may seem logical to get right to designing the user interface. That’s a mistake – a good app starts with a prototype where intuitive navigation and a seamless digital experience for users are established. Prototyping provides direction and helps to test and validate hypotheses and make adjustments before the expensive interface design is complete.

That’s it – now you’re all set for the actual development phase. To get the job done, you can either hire an in-house team or outsource mobile app development payment to a specialized agency. Both options have their pros and cons – while outsourcing is often cheaper and more efficient, with in-house development you have more control over the day-to-day operations.

Any questions? Drop us a line.


Key Features to Include in a Payment app

As in most industries, payment applications have a number of basic features that a user expects when interacting with the product. Here are some of the most important features you should include in your app.

Sign up, sign in, and MFA 

Users drop out on this step if the process is inappropriately designed. Therefore, you should carefully think through the sign-up process so that users fall in love with the app from the start. Registration and login shouldn’t only be seamless, but also secure – this is where multifactor authentication (MFA) comes into play. You can use biometric verification, one-time password (OTP), etc. as a second factor.

User profile management

This is where users can add and manage their personal information, as well as set various preferences such as notification settings, payment limits, etc.

Linking cards and bank accounts

Your users should be able to quickly and easily link their bank accounts and cards to their app profiles.

Sending and receiving payments

Users should be able to send and receive payments with a few taps – the simpler the process, the better the user experience. Consider verifying transactions with a one-time password, biometric scanning, etc.

Bills payments

It’s a nice-to-have feature that would allow users to pay their bills directly in the app without having to switch to other solutions.

Transaction history, spending analysis and reports

This feature helps users keep better track of their transactions and therefore reach their financial goals. It’s a good practice to present information in a digestible and easy-to-understand format, so make sure you design this section properly.

POS integration

This could help you target a wider market segment – e.g., you can attract merchants who want to accept payments through the app through their POS system.

Real-time support

People are very sensitive when it comes to their money, especially in case of some issues. That’s why it’s important that you offer 24/7 customer support. You can consider implementing a smart chatbot to cut support costs and ensure that users have uninterrupted access to help.

Loyalty program

Loyalty programs are becoming more common for fintech apps as they help to retain and engage users. There are several options, so you can combine best practices or create a custom loyalty program from scratch. You can also add a gamification element, which is also becoming more common in financial apps.


Well-thought-out notifications not only increase engagement and help cross-sell financial products but also serve as an extra layer of security by immediately notifying users about transactions and unauthorized login attempts. Make sure users can manage the settings so they have the best possible digital experience with your app.

How Much Does It Cost to Develop a Payment App?

The payment app development cost depends on several criteria, such as the number and complexity of features, the number of integrations, the platform, the complexity of the design, the size and composition of the development team, the developer’s rate, and more. Typically, the cost of a payment app with a basic set of features starts at $40,000. The cost of a solution with advanced functionality can reach and exceed $100,000. Contact us to get an accurate estimate for your payment app development cost.


The growing popularity of payment apps shows that people are gradually moving away from cash and card payments and using electronic transactions instead. It’s no wonder, as payment apps offer convenience and security, allowing people to manage their financial affairs from the comfort of their couch. The number of users of payment apps is expected to increase, so there is still room for new solutions.

When it comes to fintech projects, any successful app rests on three pillars: in-depth tech expertise, an understanding of the financial industry’s ins and outs, and a proper approach that includes solid project management skills, established communication processes, etc. At Itexus, we have all of these. We’d be happy to bring our expertise and skills to your payment app project – contact us to learn how we can help.

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