Peer-to-peer (P2P) payment apps have transformed the way individuals send and receive money worldwide. However, the technology and infrastructure behind these apps differ significantly by region. India’s P2P payment ecosystem relies on UPI (Unified Payments Interface), the USA operates on a mix of ACH, card networks, and RTP (Real-Time Payments), while Europe primarily depends on SEPA (Single Euro Payments Area) and local banking systems.
This article compares the commonly used P2P apps in India, USA, and Europe, analyzing their technical interfaces, transaction processing, and security features.
1. India: UPI-Powered Real-Time Bank Transfers
Google Pay, PhonePe, Paytm, and BHIM are among the most commonly used P2P payment apps in India. These apps are built on Unified Payments Interface (UPI), a real-time payment system developed by NPCI (National Payments Corporation of India). UPI has revolutionized P2P payments by enabling seamless, direct bank-to-bank transfers using virtual payment addresses (VPAs), mobile numbers, and QR codes.
Technology & Transaction Flow:
- User initiates a transaction via Google Pay, PhonePe, Paytm, or BHIM.
- The app sends a payment request to NPCI’s UPI infrastructure, which validates and processes the transfer in real time.
- Funds are instantly debited from the sender’s bank and credited to the receiver’s bank.
Security & Authentication:
- Transactions require two-factor authentication (2FA) using UPI PIN and biometric verification.
- RBI-mandated encryption protocols ensure transaction security.
2. USA: Mixed Wallet-Based & Bank-Linked Systems
The P2P payment landscape in the USA relies on apps like Venmo, PayPal, Zelle, and Cash App. Unlike India’s bank-driven UPI model, P2P payments in the USA use multiple interfaces, including ACH (Automated Clearing House), card networks (Visa/Mastercard rails), RTP, and wallet-based solutions.
Technology & Transaction Flow:
- Venmo & PayPal operate on a wallet-based model, where users store funds within the app and transfer money to others instantly.
- Zelle and Cash App support direct bank transfers, but the backend relies on ACH or RTP rails, which can take up to 1-3 days unless an instant transfer option is used (with a fee).
Security & Authentication:
- Multi-factor authentication (MFA) and encryption for secure transactions.
- Fraud monitoring systems to detect suspicious activities.
3. Europe: SEPA & Local Banking System-Based Transfers
European P2P payments leverage SEPA (Single Euro Payments Area) for cross-border euro transactions, along with local banking APIs for real-time transfers. Revolut, Wise, Bisum, and Lydia are frequently used for P2P payments in the Europe region.
Technology & Transaction Flow:
- Revolut & Wise: Offer instant intra-app transfers while SEPA transactions may take 1 business day.
- Bizum (Spain) & Lydia (France): Operate via local banking networks, enabling real-time transactions without needing an external wallet.
- Some banks offer SEPA Instant Payments, allowing real-time transactions similar to UPI but not universally supported.
Security & Authentication:
- Compliance with PSD2 (Payment Services Directive 2) and Strong Customer Authentication (SCA).
- Multi-layer encryption to protect transactions.
Conclusion: The Future of P2P Payments
Each region’s P2P payment ecosystem is shaped by local banking infrastructure, regulations, and consumer preferences:
- India’s UPI-powered system enables free, instant bank-to-bank transfers.
- The USA offers multiple options, but ACH-based transfers can be slow without fees.
- Europe’s SEPA Instant Payments are a step toward real-time transactions, but adoption is inconsistent.
As digital payments evolve, real-time, frictionless, and low-cost transactions will become the global standard, with countries potentially moving toward UPI-like frameworks to enhance efficiency.
