The age of digital payments is upon us. As an app developer or entrepreneur, you can harness this opportunity by building a payment app, like PayPal or Venmo. This blog will explain what it takes to build a payment app, and the steps you need to take on your way to success.
The payment app industry is today’s gold rush.
According to a new Fortune Business Insights’ report, the global mobile payment market rose to an astounding $1.54 trillion in 2020. The market is projected to grow to a whopping $11.83 trillion by 2028, growing steadily from $1.97 trillion in 2021 with a compound annual growth rate (CAGR) of 29.1% in 2021-2028 period. With millions of new users joining the fray every year, this makes it one of the fastest growing industries in the world. If you are a startup founder or entrepreneur, building a payment app might be a smart business decision after all.
But before you start searching for the best payment app builder or even begin to figure out how to build a payment app, it’s important to understand the market landscape.
Payment apps like Venmo, Paypal and SquareCash have become so popular that they are now verbs. You don’t pay someone through Venmo; you Venmo them. You don’t send money through SquareCash; you SquareCash it to them.
But why are these payment apps so popular?
First, let’s understand what they are…
Overview of payment apps
What are Payment Apps?
They are apps that enable people to make payments without physically using cash or credit cards. Users can send and receive money across multiple countries in different currencies – PayPal, for example, supports up to 56 different currencies.
Some of the features of payment apps that make them so popular include:
- They can be used as a merchant payment gateway for e-commerce use cases and personal use cases.
- They can be used as a virtual wallet for users to store their cash.
- Peer-to-peer (P2P) payments.
- Can be used to make online/in-store payments.
- Cross border remittance capabilities.
- Supports multiple verification methods like SMS, email or phone call.
- Allows users to pay for services and send money without sharing their financial information like credit card numbers or bank accounts.
- Credit/Debit cards and bank accounts can be linked to the payment app.
- Payment apps provide almost instant transaction processing for a reasonable fee.
- It is very safe to use online payment apps as they are protected by advanced fraud detection algorithms, secure infrastructure and multifactor authentication.
- Payments apps are under stringent regulations associated with the finance industry. That means mandatory KYC and AML checks need to be done for every user.
- They are designed to work on phones, tablets, or desktops, making it easy to access them anytime, anywhere.
- Quick, easy and convenient – No more waiting in line at the
Why create a payment app?
People Love them: The demand for payment apps is increasing rapidly. Why? Because of their ease of use and the ability to easily transfer money from one person to another without sharing or knowing any sensitive financial information is exploding in popularity. And with younger generations like Gen Z using their payment apps regularly, it has become a must-have for any business today.
Revenue Generation: Running a payment app is a great way to earn recurring revenue from the fees you charge for every transaction. Payment and transaction startups are some of the most profitable startups globally.
Technological Trend: The increasing popularity of payment apps is driven by technological advancements, allowing for more and more digital transactions. The use of smartphones is growing rapidly; therefore, the demand for payment apps will continue to grow as well. And with technologies like Blockchain technology, encryption techniques and machine learning taking over, it’s only a matter of time before we see all payments happening digitally. So, it is not surprising that many businesses are looking to ride the wave of this trend and develop a payment app.
Building a payment app: Step-by-Step guide
Step 1: Define the project scope
To build a payment app, you should understand the problem that your business is trying to solve and how your proposed solution will work. To do this, you should start by defining the project scope. Defining the project scope will help your team understand what kind of app you are trying to build, your target users, and what problem they are trying to solve.
The following is a list of what to include in the project scope statement:
- A summary of the app that needs to be built
- What should it do?
- Who are your users, and what is the user journey?
- What platform will the app run on (iOS, Android or Web)?
- The overall goal of the app
- List of features of the app:
Typical features to include are:
– Profile creation and login.
– User authentication and verification.
– Online payment capabilities.
– Payment alerts.
– Balance inquiries.
– Add funds using cards, bank accounts or cash.
– Customer support system.
Step 2: Assemble a team
Building a sophisticated and sensitive app like a payment app requires expertise in various disciplines.
- UI/UX Designers: Creates the overall look and feel of the app.
- Android Developers: They are the ones who develop apps for Android devices.
- iOS Developers: Developing an app for iPhone or iPad is the job of iOS Developers.
- QA (Quality Assurance) Specialist: They test and certify that the app is working as expected.
- Product Manager: They are the team members that bring various ideas together to create a singular product.
Actionable tips that would help you put together a team for your app include:
- Hire an app developer who already has experience in building similar apps.
- Hire only agencies with a portfolio of previous work that you can review.
- Get referrals from friends or from others who have used the app developers before.
- Hiring freelancers to build your payment app might seem cheap, but it comes with a high degree of uncertainty and unreliability.
- Look for companies that work with you to build your app and not simply for the money.
Step 3: Designing the payment flow
Designing your payment flow will help you understand how users will go through each step of the flow to transact with the app.
Your app development team can help you map user journeys, which will help figure out what pages and features need to be included in the app, where they should go, and all the possibilities for connections between each part of your app.
The user journey should include the following steps:
- Registration and login.
- Purchase a product or service.
- Paying for a service.
- aying a friend or family member.
- Receiving money from someone else.
- Other functions like receiving alerts of payment statuses, checking balances etc.
This step is typically collaborative and requires a great deal of brainstorming sessions between you and your app development team.
Step 4: Design the Payment app
An important consideration in building a payment app is designing a user interface that is both functional and easy to use.
The user interface is the first experience that your app users will have. It is important to make the design simple and intuitive so that users feel right at home.
The following are some considerations for designing your app’s user interface:
- Use colour appropriately. For example, you can use light blue for the background and dark blue to highlight some buttons.
- Use a standard font as much as possible, as it will be easier to read and use across different devices.
- Place buttons in the bottom half of the screen, as most users use phones with their right hand, and it is easier to push buttons in that area.
- Avoid unnecessary text. Your app should have as few words as possible to make the user experience seamless.
- Use icons and photos instead of text whenever possible.
- Make your app easy to use within 5 seconds, so include only the most important features to get users started with your app.
Activities at this stage that your app designers will go through include:
Create a style guide: A style guide will help you maintain design consistency in your app. It is typically a collection of designs that are approved for your app. A style guide provides the specifications of every design element used in the app.
Sketching and wireframing: They will create a series of sketches that you can choose from. Wireframes are important documents that show the different screens of your app and how they relate to each other. You can use wireframes to consider all the different possibilities for the app’s layout.
Prototyping: Once the information architecture is finalised, they create a high-fidelity app prototype that you can review.
Proof of concept: A proof of concept will help you and your team review the design and ensure it will work as expected.
Step 5: Development of the app
Once you have created your wireframes and user journeys, you can start developing the app. Your app developers transform your wireframes into a working app at the development phase.
Coding is critical in any app development process. It requires a comprehensive knowledge of programming languages relevant to the platform you are targeting.
Following are programming languages used in a typical app development process:
- Objective C/Swift for iOS
- Kotlin/Java for Android
- HTML5, JavaScript, Python for web apps
Take into consideration that there are other platforms in addition to iOS and Android. For example, you can have a Windows app.
Create a Minimum Viable Product:
We recommend that you first create an MVP of your app to launch at the earliest opportunity. The MVP will be a basic version of your app, but it should be able to accomplish the core functions of your app.
When creating an MVP, keep in mind that it is a strategy for you to test the market’s reaction to your product before you invest more time and money in it.
As you’d have guessed, this requires an iterative approach, meaning you will make many changes and improvements to the app throughout its lifetime. And agile methods are well-suited in this scenario (so factor this into your considerations when choosing app developers).
Keep in mind the following:
Managed Cloud Services for app Infrastructure:
Cloud computing is a form of Internet-based computing, where shared resources, data, and information are provided to computers and other devices on demand.
Cloud services provide a broad spectrum of the platform as a service (PaaS) and infrastructure as a service (IaaS) offerings. These services allow you to scale up or down as your app traffic and usage change.
Cloud computing allows businesses to do more with less capital expenditure on equipment, facilities, and IT staff for many apps.
Typical examples of a cloud service required for creating payment apps is using AWS Elastic BeanStalk – a service that allows developers to deploy and manage applications in the AWS cloud quickly; AWS Amplify – a Mobile Backend as a Service (MBaaS) that allows developers to manage user identities, data storage, and push notifications. While this might seem overwhelming, your app development team can help you with this.
Using APIs to Create a User-friendly Payment App:
Some of the parts can be complex or confusing when it comes to payment app development. That’s why we recommend that you work with a team with the expertise and knowledge to help you build your app.
An Application Programming Interface (API) is a set of programming instructions and standards for accessing web-based software applications.
When creating a payment app, you will be using APIs extensively to connect your app to your preferred payment processing service. Some of the APIs you might need include PayPal API, Stripe API, and Braintree Direct Payments.
ID Verification and Authentication system
Security and fraud prevention is crucial in any mobile payment app. For this reason, it is critical to use ID verification and authentication systems to verify user identities and protect user data and credit card information.
Different app developers use different solutions to improve the security of their apps, but most rely on standards like OAuth2.0 for authentication and data protection, as well as on industry standards like PCI-DSS for payment card information.
Once again, it is recommended that you work with a top app developer to find the right solution for your payment app.
Some features you can consider to improve the security of your app include:
- Biometric scans
- PIN or password protection
- Two-factor authentication
- Monitoring with Geo-fencing capabilities or alerts
- Encryption
Step 6: Testing and Deployment
Before you finally release the app, you should test it as rigorously as possible. Some of the testing you will need to do includes manual, compatibility, and stress tests.
Quality assurance is very important because even the slightest bug distracts users and can cause them to uninstall or give a bad review of your app.
Once you’re done testing, make sure to launch your app in a way that is targeted at the right audience or niche. This will help you get more downloads and improve conversions.
Post-launch marketing is also important to ensure that people know your app exists.
You can start this by using Content marketing techniques like blogging, Social media marketing, PR outreach and encouraging app referrals.
When done correctly, you will create a payment app that users love and help generate revenue for your business.
Step 7: Post-launch updates and maintenance
Once your app is released, it will still receive the necessary updates and maintenance throughout its lifetime. This is why choosing a good developer who can manage updates and provide support is important.
- Ensure users’ feedback is addressed
- Monitor the app’s analytics to spot bugs and ways to improve it
- Maintain, update, and integrate third-party APIs where necessary
Lastly…
Following the steps above will make it possible to build an app like Venmo. It’s important that you think through all the steps and don’t move too fast. The last thing you want to do is rush your project and have to start over. Building a payment app is not easy, but it can be done with the right help.