Experts estimate that the size of the worldwide peer-to-peer (P2P) payment market will grow to around $9,097.06 billion by 2030.
The Bank of America conducted a study that found over 65% of consumers use P2P payments, with the younger generation considering them a necessity. The study also revealed that more than 45% of respondents intend to try digital financial services soon. Among those who use P2P payment apps, at least 70% cited convenience and time savings as their primary motivators, while 50% attributed peer influence as their reason for use. Meanwhile, 16% of participants expressed a dislike for using cash.
That said, let’s take a closer look at P2P payments and how they work in the crypto industry. Also, if you're looking for a P2P payment platform, sign up on Ka.app now.
What Are P2P Crypto Payments?
P2P crypto payments refer to crypto transactions between two individuals without the involvement of a third-party intermediary such as a bank or any other financial institution. In these transactions, the sender and receiver send Bitcoin payments or other cryptocurrencies directly to each other using a digital wallet and the underlying blockchain technology.
How Do P2P Crypto Payments Work?
P2P crypto payments work through a decentralised network that enables direct transactions between users. The sender initiates the transfer to another crypto wallet, and the blockchain network validates and confirms the transaction, adding it to the network's immutable ledger.
The receiver can then access and use the crypto payment in their wallet. In Ka.app, the recipient can receive the payment in a different currency (e.g., sent in BTC and received in ETH) using the Easy Swap Engine.
Top Advantages of P2P Crypto Payments
Some of the top benefits of P2P crypto payments include:
1. Speed
P2P crypto payments are much faster than bank transfers because they don’t need intermediaries to verify and process transactions. Instead, as mentioned, transactions are directly broadcast to the decentralized blockchain network, which uses complex algorithms to validate and confirm the transaction within seconds or minutes.
This prevents delays associated with traditional payment methods, which may take several days to complete due to the involvement of multiple intermediaries. Additionally, you can initiate P2P crypto anytime and anywhere with an internet connection, further reducing transaction times. In Ka.app, for instance, you can complete P2P crypto transactions in just a few seconds.
2. Global accessibility
P2P crypto payments are not limited by geographical borders or traditional banking systems. You can send and receive payments with an internet connection and a digital wallet, to and from anywhere in the world. This makes P2P crypto payments particularly useful for people who live in countries with unstable or restrictive banking systems or for individuals who do not have access to traditional banking services.
In addition, you can easily convert your crypto to cash and vice versa, making it easy and convenient for people in different parts of the world to transact with each other, regardless of their location or the currency they use.
3. Security
Blockchain technology provides a high level of security through its decentralized and tamper-proof nature. Each transaction is recorded and verified on a public ledger maintained by a network of computers, making it virtually impossible for any single entity to manipulate or alter the transaction record.
Additionally, P2P crypto payments offer users complete control over their funds. Your cryptocurrencies are stored in a digital wallet that’s only accessible through a private key and is inaccessible to anyone else.
4. Privacy
The use of cryptography ensures that transactions are private and anonymous. Sensitive information is not revealed during the process, unlike traditional payment methods that may require your personal information to be disclosed to third-party intermediaries, increasing the risk of security breaches and identity theft.
5. Lower transaction fees
P2P crypto payments usually charge much lower transaction fees than bank transfers, especially for cross-border transactions, because there are no intermediaries involved who charge processing fees.
6. Lots of cryptocurrencies to choose from
One of the best things about P2P crypto payments is that you have a wide range of cryptocurrencies to choose from, depending on your needs and preferences. For instance, if you have a BTC portfolio, you can use BTC for payments, or if you prefer a stablecoin, you may use Tether (USDT), USD Coin (USDC), Binance USD (BUSD), or other tokens.
Real-World Applications of P2P Crypto Payments
People and businesses use P2P crypto payment in various ways. One of the most common ones is for cross-border transactions because of quicker transactions and lower fees. These include sending funds to loved ones, paying back a friend overseas, and more.
Many businesses have also started accepting crypto as a form of payment for their products and services, so many users now rely on P2P crypto payments for shopping (especially online), dining, and/or availing services.
How to Make a P2P Crypto Payment
Completing a P2P crypto payment is quick and easy. Let’s use how we do it in Ka.app as a step-by-step guide.
If you don't have a Ka.app account yet, please create an account here.
1. To a fellow Ka.app user
- Log in to the app.
- Continue to the home screen and tap the send icon.
- Scan/upload the QR code of the recipient or enter their mobile number.
- Select the crypto you want to send (e.g., BTC)
- Enter the amount of BTC you want to pay.
- Enter your pin code to complete the transaction.
Note: Sending crypto to another Ka.app user is free if the recipient accepts the payment in the same currency (e.g., sent in BTC and received in BTC). Otherwise, swap fees will apply.
2. To an external wallet
- Log in to the app.
- Continue to the home screen and choose the crypto you want to send (e.g., BTC).
- Tap on the Withdraw icon.
- Paste the wallet address of the recipient.
- Enter how much BTC you want to send.
- Enter your pin code to complete the transfer.
The Future of Crypto Payments
Experts believe that crypto payments have a promising future and they will continuously gain popularity in the coming years. More users accept crypto as a form of payment, and this trend could grow more as we get closer and closer to global crypto adoption.
In fact, the demand for crypto payments rose in 2022 despite the bear market. According to a study by Fidelity, around 58% of institutional investors worldwide invested in digital assets last year, a 6% increase from 2021.
Additionally, a study called "Paying With Cryptocurrencies" found that 77% of the merchants they surveyed are attracted to crypto payments because of lower transaction fees, which are approximately 1%. This is a lot less compared to the standard fees ranging from 1.5% to 3.5% charged by other payment methods, such as credit cards.
Final Thoughts
To sum up, using P2P crypto payments is a secure, fast, and cost-effective way to transfer funds directly between parties without intermediaries. Sure, some challenges are still around the corner, such as scalability and regulatory compliance, but the benefits of P2P crypto payments make them a promising option for individuals and businesses looking for a decentralised and efficient payment system.
Create a Ka.app account to get started.
FAQ
How long does it take to complete P2P crypto payments in Ka.app?
Usually, it only takes a few seconds. The actual turnaround time may depend on the currency, the amount you’re sending, etc.
How much are swap fees in Ka.app?
The rates vary depending on whether you’ve locked up KASTA tokens in the app or not. Users who lock up tokens enter tiers that provide benefits, including discounted swap fees as low as 0.376%.
How much are swap fees in Ka.app?
A cross-border crypto transaction refers to transferring your crypto to a user in a different country.
