Each of us constantly transfers funds with apps. All this is feasible thanks to the P2P payment system. Special applications allow you to transfer funds in both regular currency and cryptocurrency. At the same time, the payments are very fast. Cryptocurrency is now very popular, and Bitcoin is a full-fledged payment method. Square Cash is the most requested application at the moment. Today we will analyze in detail how this application works and how difficult it is to develop such a project.
What is it?
Square Cash App is an application that allows you to conveniently manage payments. And all this is possible only using your smartphone. It was developed by Square Inc. Initially, the project was not so large-scale, and it was used to transfer money to friends. However, Jack Dorsey, the project director, saw good prospects for cryptocurrency, and the application began to work with digital money. This brought the Square Cash App widespread popularity in the USA.
Benefits of the Square Cash
In 2018 the mobile service became the most popular application in the finance category in the US Google Play store, bypassing PayPal in the number of downloads. Benefits of an app:
- You can transfer funds using a phone number or email.
- You can buy or sell cryptocurrency in the app.
- Sophisticated multi-level protection.
- Transactions are fast and do not require long confirmation and receipts.
- A fixed commission that saves users money.
- The application uses $ Cashtag. This is a unique identifier to preserve the anonymity of all users.
- Good bonus programs.
- Money transactions are carried out using phones, computers, and even Snapchat.
Payment security is the main quality of a good payment system. The company itself states that Square Cash provides complete security for customer’s data. All information is securely encrypted and stored on servers. At the same time, users don’t have to worry about data even if you use public WI-FI for operations.
To make the application safe, Square Cash always:
- Sends a one-time access code every time you enter the app;
- It is advised to enable the Security Lock option to request a password before each operation;
- Sends notifications of all actions with funds;
- Keeps the balance of bitcoins in an autonomous system;
- Protects users from scammers.
If you are planning to develop a similar payment system, you should seriously approach the issue of security. To gain customer confidence in security, you can be certified in accordance with the requirements of the payment card industry. Obtaining a certificate will also enhance your reputation and ensure a serious attitude to all your services.
App monetization model
The application provides all basic services for free. Square Cash makes money for the development of the project by providing additional services and user fees.
The Square Cash application provides business customers with favorable conditions, receiving a commission of 2.75%. This is a good deal both for the app and for customers because commissions for entrepreneurs are much larger.
Fast transactions and payments
The application allows you to instantly transfer money. This is very convenient when the user cannot wait for a standard day. However, this service is not free, the client needs to pay an additional 1.5% of the transfer amount.
You can sell or buy cryptocurrency in the Square Cash App. It is absolutely free. It is only necessary to take into account that the bitcoin exchange rate is not constant and the difference in value will be up to 4%. The application makes a profit precisely from this difference in amounts: it buys cryptocurrency at a fixed price and sells it a couple of percent more expensive. According to Square’s annual report, in 2018, the app received $ 1.7 million in bitcoins.
What about the cost?
This is perhaps the most interesting question for anyone who decides to make applications. On average, the total cost of developing an application such as Square Cash varies from $20,000 to $150,000. The cost will depend on how many opportunities you want to realize in the project. The most important functions that determine the cost:
- App unlock view;
- A bonus system, inviting friends;
- The number of transaction channels between users;
- Payment by cards on online sites;
- Linking bank accounts to the application;
- Customer support.
A payment application is quite difficult to develop. It is necessary to ensure impeccable security for user tools. There may also be difficulties with currency conversion or restrictions on the location of customers. Another important point is compliance with financial standards. A P2P app must take into account the legal regulations of each region in which it will operate.
In the US regions, it is quite difficult to formalize everything from a legal point of view. The fact is that there are more than eight federal agencies involved in regulatory compliance. Moreover, there are fifty states in the USA, and each state has its own financial rules. Therefore, you should consider this if your market is the US.
If you create an application for the Asian sector, you need to get approval from the People’s Bank of China (PBOC) Committee for the Chinese market and the Financial Services Center (FSC) if your market is Korea.
The rules of the European Union regarding P2P payment applications are specifically described in Directive (EU) 2015/2366. In addition, all applications that process the personal data of EU citizens must comply with the GDPR rules.
To release the application for the Australian market, you will need to resolve legal issues with the Australian Securities and Investments Commission (ASIC) Innovation Hub.
So is it worth making a P2P app?
Now you know what work moments need special attention when developing a P2P application. Weigh all the benefits and challenges of creating a Square Cash-like service before you get started. If you are enthusiastic and ready to deal with difficulties, you should start developing such a complex, but profitable application. The main thing is to take into account all the nuances and protect each client.