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Guide to International Peer to Peer Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedOct 20212 min read

How does your business send and receive international payments? There are multiple options on the table, from wire transfers to credit card payments. One solution growing in popularity is a peer to peer transfer.

How do international peer to peer payments work?

International bank transfers require a third party to facilitate the transaction. This ensures that funds from one currency can be exchanged into a secondary currency and deposited into the international account. With peer to peer (P2P) payments, the middleman is removed. Instead, consumers can send and receive funds directly from their contacts using a dedicated P2P platform. Here’s how it works:

The user signs up and creates an account with a peer to peer platform.
The user provides bank account details for the sender and recipient.
The sender transfers funds to the peer to peer platform account.
The peer to peer provider converts the funds into the appropriate currency.
The funds are deposited into the recipient’s account.

Peer to peer mobile payments in Australia

This entire process takes place using your computer or smartphone, with no need to set foot in a bank or currency exchange office. Within Australia, you have your choice of several P2P payment providers.

1. CurrencyFair has central offices in Australia, Ireland, and the UK, but its platform provides currency exchange transactions in Europe and elsewhere.

2. Wise (formerly TransferWise) offers a mid-market rate for currency transfers, matching members with one another to get the best rate. Essentially, you can open your own online bank account in a variety of local currencies.

3. PayPal peer to peer payments are part of its comprehensive online payment services. It’s one of the most user-friendly options out there, particularly for one-off or occasional payments to international contacts.

4. Cryptocurrency is an emerging way to send payments to peers, though you’ll need to set up the appropriate blockchain to use this technology. It’s also worth noting that cryptocurrency payments can fluctuate widely according to market value.

Are international peer to peer payments safe?

It’s only natural to be somewhat hesitant about transferring funds using a mobile app, but rest assured that most peer to peer payments systems out there are perfectly safe. Most are now regulated by the Australian Securities and Investments Commission (ASIC), which means there are certain transparency standards they must uphold. You should also take care that the platform uses standard security features like two-factor authentication, biometric data, and encryption.

Pros and cons of peer to peer mobile payments

Compared to the old-fashioned method of wire transfer, there are some distinct advantages to P2P payments.

Rates are more competitive
There are no minimum transfers
Processing times are faster

On the other hand, P2P payments won’t be right for every transaction. They’re great for splitting bills or sending gifts to friends and family abroad, but if you need to transfer large sums of money, they’re not always the best option. This is because fees tend to be charged as percentages of the total transfer amount, and this can really add up.

How to choose the best peer to peer payments system

Whether you stick to PayPal peer to peer payments or use a platform like Wise, there are a few factors to consider. All these systems involve some sort of fee structure, generally a service fee per transaction. In addition to fees, compare security features. Is the provider regulated by ASIC? Is it associated with a bank? Is all financial information adequately encrypted from end to end?

Finally, how easy is the platform to use? To send and receive peer to peer mobile payments, both you and your contact usually need to sign up for the same app. A user-friendly design will make these payments run far more smoothly for everyone involved.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.