The Pros and Cons of the Top 6 P2P Payment Services

Whether you’re splitting a dinner check or reimbursing a buddy for concert tickets, P2P (peer to peer) lending apps let you easily transfer cash — and possibly save money doing it. More services are competing for your business than ever before, and the options can be overwhelming. Whichever service you choose, watch out for delays and fees — and never make transfers with people unless you know and trust them.

VENMO

Pros: Massive user base, most transactions are free, lots of extras, strong security

Cons: Guests can’t send and receive payments, users can’t split checks with payments Venmo has become a dominant player in the P2P field, which means it’s likely people you know might already be using it. Keep in mind that Venmo isn’t just a payment-transfer service, it’s also a social network, so keep shopping around if you’re private about money. A small fee applies only to credit card transactions, not to debit cards, bank accounts, prepaid cards, or your Venmo balance. There’s also a 25-cent charge to transfer money out.

PAYPAL MOBILE

Pros: The PayPal brand, store purchases and friend/family transactions, works internationally Cons: Extra fees Want to keep it simple? PayPal is basic and straightforward. Significantly, you’ll likely encounter few websites that don’t feature a PayPal logo and your friends probably already use it. The drawback lies in its P2P fees. The 2.9 percent credit card fee is standard, but that rate also applies to debit cards and PayPal credit — only PayPal balance and bank account transactions are free.

ZELLE

Pros: Instant, free cash transfers from Zelle-backed banks Cons: No credit card support The popularity of P2P money transfer apps has inspired big banks to get into the business, too. Many of America’s major financial institutions back Zelle, which means the platform is designed to serve only customers of those banks. It’s a fast, free, and simple service that easily integrates into your existing bank’s app if both the sender and recipient use a participating bank.

SQUARE CASH

Pros: Simple, free, lets you stash money in the app with the Cash Drawer feature Cons: Low sending limits and no credit card support The bare-bones Square Cash platform is not for people looking for a comprehensive virtual wallet. The no-frills interface is refreshing to many since it only works with debit cards and doesn’t require users to link to social accounts. Since credit card transactions aren’t an option, there are no fees for any non-business transactions.

FACEBOOK MESSENGER

Pros: Simple, free and built right into the familiar Facebook Messenger app Cons: No credit card service, can’t adjust check splits If you want to exchange money with your Facebook friends, it doesn’t get much simpler than the Payments feature in the Messenger app. You can send and receive money right in a message. Setup requires adding a debit card and the service is free. Its simplicity, however, might be limiting for some. You can’t manipulate split amounts on checks and you can’t use credit cards.

SNAPCASH

Pros: Virtually no setup for Snapchat users, simple and free interface Cons: No credit card service or bill splitting Snapchat users can send and receive money through Snapcash. The format is as simple — and as limited — as Facebook’s platform. Debit cards are the only option, and although “flicking” money is simple, flicking cash for adds, snaps or stories is forbidden.