How to Build a Money Transfer App

Key takeaways

• • Mobile transfer apps help users to make digital transactions in a convenient and secure way. Today, these apps are in high demand, making the industry attractive to developers.
  • To build a money transfer app, you’ll need a plan, a design, code and to test the app, release it, and collect users’ feedback.
  • Include the most important features like registration, transactions, and transaction history but don’t overload your app. A good compromise is to build an MVP first.

How do payment apps work?

Mobile transfer apps, also known as mobile payment apps, offer a convenient and secure way to make P2P (peer-to-peer) payments without the need for cash or physical cards.

Users simply download and install a payment app on the mobile device and sign up for an account. Then they need to verify their identity, for example, add a PIN or fingerprint. That’s it, now they can receive and send money. To make a payment, they enter the recipient’s details and payment amount. Then, users complete the transaction and receive confirmation. Depending on the app type and the purpose of payment, the process may slightly vary.

Types of money transfer apps

There are 2 main types of money transfer apps for P2P payments.

Independent services

Payment services allow users to send money from their bank account/credit card to another person using only a phone number or email address. Common examples are Apple Pay, Google Pay, and PayPal. Here, you can set up a digital wallet to store funds and make P2P payments from within the app. 

Built-in services 

Since making payments is an integral part of our daily routine, various apps include a money transfer feature as one of their functions. For example, a mobile banking app allows users to transfer money between accounts within the same bank or to other banks. Messengers may include a transfer function to send money instantly while chatting. There are even more complex options like payments via smart speakers.

With built-in services, users often need to link a bank account or a card before they initiate a transfer. Check out our article if you want to dig deeper into the robust P2P payment app development.

⭐ Purrweb’s case   A client reached out to us to create a money transfer app for Kuwaitis. While online banking services were not widely used in the country, there was a clear demand for a P2P payment app. And the client wanted to address this gap through their app. We built an MVP that had essential money management features: addition of cards, transfers to friends, and a transaction history. We delivered the project on time, and the client presented the app to investors. They managed to raise $1 million in the first funding round. The app now has over 100,000 users and continues to grow actively.

Money transfer app market overview

Mobile payments have gained huge popularity, with more than 4.43 billion active users in 2023. Global adoption is expected to reach 4.8 billion users by 2025.

The global P2P payment market was evaluated at $3.21 trillion in 2023 and is forecasted to hit approximately $13 trillion by 2032, according to the Global Market Insights  report. The market will be growing at a compound annual growth rate of 156% from 2024 to 2032.

The leader in mobile payment adoption is China. By the end of 2021, 968.85 million people, which is 70% of the country’s population, used mobile payments. Chinese people develop a money transfer habit, as online solutions are fast and accessible. 

But the demand for mobile payments is not driven only by convenience. In many countries and regions, there is a significant number of unbanked people who lack access to traditional financial services. Financial inclusion around the world is yet to be improved, according to the World Economic Forum review. 

People who don’t have a bank account need an alternative means to pay online. Therefore, to create a money transfer solution is a reasonable choice for app developers.

How to build a money transfer app in 9 steps

When you decide to develop your own custom money transfer app, we advise starting with an MVP. A minimal viable product is a version of the product that includes basic functions only. It is a great choice for entrepreneurs, who want to test the idea on the market with a minimum budget. 

Our team has experience in creating functional MVPs, having developed a crypto wallet that allows buying, storing, and transferring different cryptocurrencies.

Here is the step by step process, if you’re looking to create a money transfer app.

Step 1. Formulate your idea and do the market research

The first step in developing a successful money transfer app is to come up with an idea and define the main goals. Conduct market research to identify the needs and preferences of your target audience. Analyze your competitors to find any gaps that you can fill with your app. 

We’ll tell you about the importance of market research, using an example from our practice. Our client wanted to build a dating application and combine it with artificial intelligence. The client wanted the AI to help users fill out their profiles and give recommendations. This would help users increase the number of likes and matches. 

The client thought this idea would be very popular. But they didn’t communicate with the target audience, and everything was based on their hypotheses. To avoid making a mistake and investing all their money in development, they turned to us for Project Discovery services.

We identified the audience segment and started researching if there was a need for such an app. We tested the idea through the Jobs To Be Done (JTBD) framework. It focuses on people’s needs and how to solve them. Next, we made hypotheses that we would test during the research.

We conducted 11 interviews and found that users like existing services — they are not interested in a dating service with AI. We gave the client 3 options: build an MVP, do more research, and change the concept. He took a break to think about what to do next.

Step 2. Identify the main functions of the MVP

Once you have a clear idea of the purpose of your app, choose the core functions. Check out the main features we discussed above and include account management, basic money transactions, and transfer tracking. Using this, you can build a roadmap for the development process.

Step 3. Create a design

Design affects the user experience and engagement with the app. Work with a team of professional UI/UX designers to create a visually appealing and user-friendly interface. Designers will create a mind map and wireframes first to make sure that the design meets your needs, and then turn them into live clickable prototypes.

Step 4. Develop your app

At this stage, we start the software development itself. It consists of two main parts: the backend and the frontend. The backend manages data, handles banking transactions, and ensures security measures are in place. Everything works smoothly thanks to these processes behind the scenes. Meanwhile, front-end developers focus on the user interface and experience. They turn the design prototypes into your money transfer app with user-friendly buttons and convenient screens.

This is also the time when you face the capabilities and limitations of the chosen tech stack. It’s not just about improving quality, but also about reducing the expenses.

For example, we often use the React Native framework for mobile app development. With this technology, the development team creates an app for iOS and Android simultaneously. Therefore, our clients save their time and money on developing their apps while still being able to focus on the business needs.

After working through many variants, we opted for JavaScript frameworks. The choice enabled us to successfully develop over 300+ projects using this tech stack. Here’s the detailed description:

Back-end	Node.js, JavaScript	Provides developers with a scalable and efficient backend architecture.
Front-end	React Native, React.js, Electron.js	React Native saves around 30% on your cross-platform (iOS + Android) mobile app development costs. React.js and Electron.js make web and desktop app development fast and efficient.
Infrastructure	AWS, Heroku	Provides a scalable infrastructure for hosting the app and offers a range of features such as automatic scaling and continuous integration.
Database	PostgreSQL, MySQL, Redis	Combining different databases helps to store data and ensure maximum protection.
Real-time messaging	WEBRTC	Useful for implementing real-time communication features such as chats and audio calls.

Step 5. Ensure Security

Of course, when dealing with money within an app, it requires the highest level of security. To ensure safety, implement encryption to secure data transmission between the app and the server. Add multi-factor authentication and careful user management. 

Limit access privileges based on roles and permissions to prevent unauthorized access to sensitive functions. Follow financial regulations, including Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.

“Better safe than sorry” is the first rule. Regularly check your app’s security and potential weaknesses. With a clear incident response plan outlining steps to take in case of a security breach, you’ll be well prepared to keep users’ money safe and secure.

Step 6. Integrate third-party APIs 

External services offer a broader functionality. For example, instead of simply sending money, users can exchange currency and pay bills securely. APIs act as bridges between the app and these external services, providing a structured way to exchange data and instructions.

Here are some APIs your future app may need to satisfy the customers:

• • Utility and payments. These APIs enable users to pay bills, purchase services, or make in-app payments.
  • KYC/eKYC process automation. They authenticate users by cross-referencing their identification documents, enhancing the app’s security and regulatory adherence.
  • International transfers. These APIs facilitate сross-border payments. They integrate with global financial networks and foreign exchange services.
  • Currency exchange APIs. They provide real-time exchange rates and facilitate currency conversion within the app.
  • Card payments. Integrating card payment APIs allows users to link their bank cards for transactions. Allowing for transfers or purchases using their bank cards.

That’s an important step in creating a fintech app. In a crowded market, integrating unique APIs can give a money transfer app a competitive edge. Besides, being a good foundation for the future. As the app grows in popularity, along with theuser base, APIs allow for scalability without compromising on performance. They can efficiently handle a higher volume of transactions and interactions.

Step 7. Run tests 

Set aside some time to conduct thorough testing, so that the app functions smoothly, without any bugs. Check compatibility on different devices and operating systems. This is especially important for a money transfer app as its users will be concerned about security and even minor bugs  or glitches may adversely affect the app’s reputation.

Step 8. Release your MVP

When the app is tested and ready to go, it’s time to release it to the market, publish the app on various app marketplaces like App Store and Google Play and promote it through social media or other marketing channels.

Step 9. Take care of the post-release support

The launch is not the final step in developing a money transfer app. You’ll still need to resolve issues that arise after the app is released, fix bugs, and add new features if needed. Be sure to listen to user feedback and continue to update and improve the app.

You have learned how to create a money transfer app and all the nuances related. Let’s now consider the app’s main benefits for users.

Benefits of using a money transfer app

These statistics alone sound inspiring, don’t they? But why do consumers love them so much? There’s a lot of reasons, but let’s go over them one by one:

Lower fees

Consumers are happy to sacrifice some perks of traditional banks in exchange for lower commissions and better UX. Money transfer apps often have lower fees or a better exchange rate compared to traditional transfer services. Some apps may even offer fee-free transfers for certain transactions or within specific regions.

Available 24/7

Money transfer apps are available 24/7, allowing you to send or receive money at any time, including weekends and holidays. Whether it’s sending funds to a family member in an emergency or paying a bill that can’t wait, these apps provide easy access to your money whenever you need.

Transaction speed

Money transfer apps allow you to send and receive money quickly and easily, often with just a few taps on your smartphone. This eliminates the need to visit a physical bank branch or ATM, saving you time and effort.

Record keeping

Money transfer apps maintain a transaction history, making it easy for you to track your financial activities. It’s a convenient way to stay organized, track your financial health, and ensure you’re meeting your financial goals.

Integration with other services

Some money transfer apps integrate with other financial services, such as bill payment, mobile top-ups, online shopping, and different payment systems.

Money transfer app development trends

If you’re thinking about developing your own money transfer app, you should be aware of the major trends in the fintech industry, so that you are able to suggest some ideas on the app’s functionality to your development team.

Contactless payments

Contactless payments have become an integral part of our daily routine, near-field communication technology (NFC) speeds up the payment process. Simply hold yuor phone against the terminal and it is done. Contactless payment also removes the risk of someone catching sight of your PIN while paying.

Payments in messengers

It is much more convenient to receive money or send it to our friends/family while messaging. As it stands, we have to switch between the apps to split expenses, or contribute to group gifts. Now, messengers are taking their first steps towards money transfers integration. For example, Chinese citizens use WeChat banking and Facebook Pay is available in some countries outside the US.

Mobile wallets

Digital wallets allow to make quick and secure payments at the touch of a button. Electronic wallets also simplify money management by offering transaction history, expense categorization and statistics. 

Payments via smart speakers

Even now, we have the option to use smart speakers as a means of handling our money matters. No need to pick up your phone or open the laptop, just ask your smart speaker to transfer funds, pay the bills or check the balance on your bank account.

Features of a money transfer application

App functions usually fall into one of two categories, mandatory or optional. The cost of development and the time it takes depend on the number and complexity of functions. Custom applications with complex internal processes, such as blockchain solutions, are usually more expensive.

Let’s take a closer look at the features you need to consider.

Must-have features of money transfer apps

Here are the core features that make a money transfer app efficient and secure. As an app owner, pay special attention to them during fintech software development.

• • Creating a user account or a wallet. This is the first step users take after downloading an app. They should either link their credit or debit card to the app or create an account with an e-wallet to store their funds.
  • Viewing and editing user details. There should be an opportunity to view and edit personal and financial information such as name, address, contact details, linked cards or bank accounts.
  • Making basic financial transactions. Add an ability to send and receive money, and allow setting up recurring transfers and automatic payments. If your users can also pay bills and make purchases directly from the app, they are more likely to integrate it into their daily lives.
  • Tracking transfers. Transaction history is essential for allowing users to track the status, date, time, recipient and type of of transfers.
  • Notifications. Utilize notifications to inform users of important updates and events related to their accounts and security. These can be transaction updates, security alerts, reminders, promotions, and offers. You can use push notifications, SMS, or emails.

Nice-to-have features of money transfer apps

Apart from creating essentials, you could add extra features that will complement your money transfer app and make your users enjoy using it. Here are some examples.

• • Making transactions in different currencies. Most popular money transfer apps support multiple currencies and cryptocurrencies, offering real-time exchange rates. This helps users send and receive money across borders.
  • Changing the interface language. Many applications offer a multilingual interface for the convenience of users who speak different languages. This is not a fintech-specific function, but it’s necessary to bear this in mind as part of the user experience.
  • Two-factor authentication (2FA). You can add an extra layer of security by asking users to enter a code sent to their phone or email before making transactions. To ensure security, implement advanced security protocols and data encryption.

Legal standards in fintech

Compliance with accepted standards is a mandatory requirement for every financial app. The financial data flow is tightly regulated, making it important to understand the nuances of the banking industry. 

The industry is subject to strict regulations, including:

• • Anti-Money Laundering Policy (AML)
  • Know Your Customer (KYC) verification
  • The Payment Card Industry Data Security Standard (PCI DSS)
  • The General Data Protection Regulation (GDPR)

Before you develop a money transfer app, consult a business analyst who can advise on the specific laws and standards that apply to your particular service.

App security aspects

Everything that deals with money requires extra caution. So, the level of security and user-friendliness are among the first things that users pay attention to when using money transfer services. That’s why it’s so important to ensure the security of the app.

Let’s look at security measures that are worth implementing in online banking apps:

Encryption and data protection

When transferring money, the data is encrypted into an unreadable format on a user’s device, then sent through communication channels. Finally, it is decoded at the recipient’s end with the correct decryption key. Even if a hacker gets access to the data during its transmission — they will not be able to read the text.

Strong encryption and regular updates are vital to keep the data protected.

Multi-factor authentication

MFA requires additional information from users to access their account. The more authentication methods are used — the better. It can be a standard security code sent to the email or another device. And, with the development of technologies, it’s now possible to use our biometrics, like scanning our fingerprints or facial features. The latter is considered as one of the most secure methods for ensuring safety.

Multi-factor authentication minimizes the risk of unauthorized access, making it impossible for hackers to log into a user’s account even if they know the password.

Fraud detection and prevention

Money transfer platforms must have powerful fraud detection and prevention technologies. Algorithms can analyze user behavior patterns as well as transaction history. So, when there is suspicious activity detected, like unusual login locations, transaction amounts, or multiple rapid transactions, the account is suspended until the user verifies themselves.

Costs to create a money transfer app

Let’s have a look at some important factors that affect development costs:

App features and complexity

Generally, the more features you want to include in your money transfer system, the higher the development costs. Each additional feature requires coding, testing, and potentially integration with external services or APIs. That’s why sometimes it’s better to start with some must-have features. If you want to add bill splitting, international transfers, or unique user interactions, the complexity increases. .This drives up costs. In addition, if your app offers complex features, you may need to invest in customer support.

Platform and tech stack

Using cross-platform development frameworks like React Native reduces costs compared to developing separate native apps for iOS and Android. React Native framework allows to re-use of code the code across platforms. Opting for widely used programming languages with a large developer community also helps to reduce development costs.

Design and user experience

Creating an appealing and user-friendly interface requires the expertise of UI/UX designers. The complexity of the design, including the number of screens, unique graphical elements, and animations, can significantly impact costs. Ensuring the app works seamlessly across various devices and screen sizes (including smartphones and tablets) also increases development complexity and costs.

Maintenance and updates

As we discussed earlier, ensuring the app’s security is a top priority. This ongoing security maintenance requires resources. Regulatory environments can also change over time, requiring updates to the app’s compliance measures. With each update or enhancement, testing is necessary to ensure that new changes don’t cause bugs. This testing phase contributes to ongoing development costs.

Overall, the team of 5 people will work on your money transfer app. Here is the timeline with prices:

The service	Estimated time frame	Price
Project analysis	1 week	Free at Purrweb
UI/UX design	1,5 months	$7,550
Development	2 months	$65,000
QA testing	in parallel	$9,280
Project management	throughout the entire development	$11,550

According to similar projects we’ve made, the estimated cost of a money transfer app is from $85,000 to $98,000 for a full cycle of development, including UI/UX design, creating iOS and Android versions, as well as QA testing.

How we created a cryptocurrency wallet

In the fall of 2021, Broex requested our services to help them build a licensed multi-currency crypto wallet. Our clients already had the browser version of the app but their mobile version kept getting rejected from the App Store.

The goal was to develop a cross-platform application for iOS and Android from scratch, avoiding the mistakes of the previous team and dealing with the other team’s backend. 

Still, there were some more challenges to complete. This was one of our first crypto projects. Despite the work involved and the knowledge required, our team was eager to get involved in this field and picked everything up quickly.

Secondly, the app had to be as user-friendly as possible. Broex was aimed to help newcomers to crypto, who may abandon the app at the first sight of any problems. We gave a lot of attention to navigation and interface details without overloading users with information.

As a result, we developed the first versions of the app where users could:

• • complete the registration and KYC procedure;
  • set up security measures in the profile;
  • view a list of assets and their details;
  • explore and add noteworthy assets to favorites.

Later, we added financial transactions. Beyond simply receiving and making payments to a unique wallet address but also using a card to buy and withdraw assets.The latest release introduced biometrics for iOS devices, enabling users to log in to the wallet using Face ID and Touch ID. We also updated the profile to feature default currency, social media integration, and app version info.

Summary

Billions of people use money transfer apps every day, and will continue to do so. It is predicted that the number of users will gradually increase with the rise of more accessible technologies. So, the choice to create a money transfer app is likely to be a viable and profitable one. 

If you are a startup, you have an app idea you plan to bring to life, and need technical assistance, Purrweb will help you to build a money transfer app that caters to your users and generates revenue. Fill in the form below, we can get to work calculating timeframes and development costs specifically for your needs. Launch your app with Purrweb.