A payment app is an app on your phone or device that lets you send, receive, or manage money digitally. It often links directly to your bank account, credit card, or digital wallet and can be a more convenient payment option than cash. Mobile payment apps (e.g., Cash App) make it easier to pay a friend back, split a bill, shop online, or make purchases in person without the need for a card or cash. More than 2 billion people around the world use payment apps, with the total volume of mobile payment transactions reaching $7.39 trillion in 2023.

Below, we’ll discuss why you might create a payment app, how to build one, and the best tools for payment app development.

What’s in this article?

• Why create a payment app?
  
• What features should a payment app include?
  
• How do you start developing a payment app?
  
• What are the best tools for payment app development?
  

Why create a payment app?

Creating a payment app can offer several benefits. If your app has a distinct selling point—such as the reduction of fees, simplification of the user experience, or a solution to a specific challenge—it could help you succeed in a competitive space. As technology advances (think blockchain, artificial intelligence [AI], etc.), the potential for creating apps that offer innovative solutions and fill gaps in the market increases. Here are some reasons you might want to create a payment app.

• Growing digital payment market: An increasing number of people are shifting away from cash and toward digital payments. In 2023, 69% of online adults in the United States said they had used a digital payment method to make a purchase in the preceding three months. The market is still growing and there’s room for improvement, especially in regions where digital adoption is steadily increasing.

• Niche opportunities: You could customize your app to serve a specific audience or solve a distinct problem. For example, you could provide payments for freelancers, international remittances with low fees, or industry-specific payment solutions.

• Revenue potential: Payment apps often generate revenue through transaction fees, subscription models, partnerships, or value-added features such as investment options and credit deals.

• Customer convenience: Businesses that integrate payment solutions (e.g., marketplaces with built-in payments) can offer a more convenient customer experience that keeps users engaged.

• Data insight: Payment apps can give you access to valuable user data, which can inform your business decisions, help you personalize services, or support your partnerships with other companies.

• Market gaps: There’s always room to improve existing solutions. For instance, simplifying cross-border payments, enhancing security features, or speeding up transaction times are advancements that can set a new app apart from others.

• Financial inclusion: In emerging markets, a payment app can address the needs of unbanked or underbanked populations, giving them the ability to conduct digital transactions for the first time.

• Brand loyalty and retention: If you pair a payment app with other services (e.g., shopping, booking, social features), you can increase user interactions and encourage brand loyalty.

• Partnership potential: Payment apps often present opportunities for valuable business partnerships. Integrations with ecommerce, retail, and service industries, can create collaboration opportunities.

What features should a payment app include?

A payment app needs to balance functionality, security, and ease of use. Here’s a list of features that really matter if you want to build an app that is competitive and user friendly.

Fast, flexible transactions

• Instant payments: Nobody wants to wait three days for an account balance to update. Your app should enable instant or nearly instant money transfers.

• Multicurrency support: If you’re targeting global users, your app needs to let them send and receive international payments in different currencies, ideally with transparent, low exchange fees.

• Split payments: The ability to split costs within an app can make users’ lives easier. It facilitates payment scenarios such as group dinners and shared bills.

Easy integration with bank accounts and cards

• Banking integration: Users should be able to easily link their bank accounts, credit and debit cards, or digital wallets, such as Apple Pay and Google Pay.

• Direct deposit options: The ability to receive payments directly into a bank account is invaluable, especially for apps that target freelancers or small businesses.

Top-tier security

• Two-factor authentication (2FA): You should consider 2FA a nonnegotiable inclusion in your app. Provide customers with authentication options such as biometrics (e.g., fingerprint or facial recognition) and app-based codes.

• Fraud detection: You can use AI to flag unusual transactions automatically. This is the type of feature users might not think about until they need it.

• Encryption: End-to-end encryption for every transaction should also be nonnegotiable, as users will feel more assured that their data is safe from leaks.

Requests and reminders

• Payment requests: A clean, automated payment flow makes it easier for users to request payments from others or set reminders for recurring bills. These abilities can save users time and frustration.

• Customizable notifications: Nobody wants to receive irrelevant alerts. Let users control what they’re notified about, including large transactions, payment confirmations, and when someone sends them money.

Scalability and upgrades

• Future-proofing: As your user base grows, you can introduce features such as recurring payments, subscription management, and even AI-based budgeting components.

• Low or transparent fees: If you charge transaction fees or sell premium features, be up front about costs. Hidden fees can negatively impact user confidence.

A convenient customer experience

• Customer-friendly onboarding: You can make sign-up simple but secure by using an identity verification method that doesn’t feel intrusive; scanning an identification card (ID) or linking a verified account can feel less invasive than biometric verification, which can involve fingerprints or facial recognition.

• Customer support: A chatbot is fine for basic questions, but you might also want to offer ways to contact real humans—think chat, email, or phone—when something goes wrong.

• Personalized dashboard: You can show users analyses of their spending habits or payment histories with a sleek, intuitive dashboard. An insight like, “You spent $200 on coffee this month,” can be helpful to users.

• Social media: You might want to add an optional social component, such as a payment feed where users can share their transactions with friends.

Accessibility and ease of use

• Localization: If you’re targeting specific regions, be sure to cater to their respective needs. For example, you can create a Unified Payments Interface (UPI) integration in India or enable instant mobile money transfers in African markets, where that payment method is preferred.

• Cross-platform compatibility: Your app needs to work without issue across mobile (iOS and Android), desktop, and wearables. It’s even better if the app syncs perfectly between devices.

• Offline mode or backup options: You can allow users to initiate payments offline, perhaps by generating a code they can redeem when both sender and recipient have connectivity.

Advanced options for niche users

• Small business add-ons: You might want your app to include methods for invoicing, tracking expenses, or integrating with accounting software such as QuickBooks.

• QR code payments: QR codes facilitate fast payments, especially for in-person transactions. Customers can easily scan them and pay on the spot, and businesses can keep their checkout lines moving.

• Crypto integration: You might consider enabling crypto transactions for those who want to pay or get paid with digital assets.

How do you start developing a payment app?

When creating a platform that handles sensitive financial data, you need a well-thought-out strategy for every step of the development process. Here’s how to get started.

Define the problem you’re solving

Before anything else, figure out what makes your app different. Are you targeting a particular audience, such as freelancers or small businesses? Are you simplifying split payments, solving an issue with cross-border payments, or promising lower fees? Specify your niche: it’ll guide everything else.

Understand the related laws and regulations

Payments are heavily regulated, so start learning about the space as early as possible. Devote time to the following tasks:

• Researching compliance requirements for handling card data, such as the Payment Card Industry Data Security Standard (PCI DSS)

• Checking local data privacy regulations for the regions you’ll operate in, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA)

• Obtaining any licenses you might need, such as a money transmitter license in the US

• Partnering with a fintech lawyer or consultant at this stage can be beneficial and help you address any regulations

Design the core features

Decide exactly what your app will provide to users. At a minimum, most payment apps need:

• The functionality to send and receive payments

• Account linking for banks, cards, and digital wallets

• A transaction history feature with precise, easy-to-read details

• Security measures such as encryption, 2FA, and fraud detection

• Tools such as invoicing and payment reminders (if you’re targeting businesses)

• Intuitive blueprints or mock-ups to visualize the path the user will take

Choose the right tech stack

You’ll need technologies that ensure your app’s growth, speed, and security.

• Frontend: Frameworks like React Native or Flutter can help you easily build cross-platform apps for iOS and Android.

• Backend: Secure, flexible options like Node.js, Python (Django or Flask), or Ruby on Rails can be good for backend development.

• Database: You’ll need a reliable database like PostgreSQL or MongoDB to handle transactions.

• Application programming interfaces (APIs): APIs are needed for banking integrations (e.g., Plaid, Yodlee), currency conversion, and payment gateways.

• Cloud services: Amazon Web Services, Google Cloud, or Azure can host and scale your app.

Integrate with Stripe

If you’re not building your own payment processing system, Stripe can assist your business. It handles payment authentication, fraud detection, and more. It also comes with a developer-friendly API, flexible integration options, and support for a wide range of payment methods. Whether you’re building a simple checkout process or a more complex billing system, Stripe can help make it easier to get started without worrying about the details of payments infrastructure.

Focus on security from the beginning

Security should be at the foundation of your app. You need to incorporate it from the start in the following ways:

• Use end-to-end encryption for all transactions.

• Implement tokenization to protect sensitive data, such as card details.

• Include fraud monitoring and user alerts for suspicious activity.

• Regularly test your app with vulnerability assessments and audits.

Build a prototype or minimum viable product (MVP)

Start small and focus on the core features that will solve your users’ primary issues. An MVP lets you test your idea without pouring resources into a full-scale product. Here are some potential steps for creating an MVP.

• Build a clean, user-friendly interface.

• Let users send and receive money.

• Include basic transaction histories and account linking.

Test the app thoroughly

Payment apps need to work reliably before launching. Test for the following:

• Functionality: Do payments process correctly? Are notifications accurate? Is the user flow intuitive?

• Performance: Does the app work well under heavy loads?

• Security: Is the app routinely tested for vulnerabilities such as data breaches and unauthorized access?

• Compatibility: Does the app function consistently across different devices and operating systems?

Plan for growth

Even in the early stages, think about how your app will handle growth. Use cloud services that can scale as your user base expands. Keep your backend flexible so that features such as recurring payments and cryptocurrency support don’t require a full rebuild to implement.

Launch strategically

When you’re ready to go live with your app, you need to:

• Start with a soft launch to a small user group for final testing.

• Gather feedback and resolve any last-minute issues.

• Roll out the app gradually and focus on a specific market or audience before expanding.

Market the app and grow

After you launch the app, marketing becomes just as important as development. Focus on the following:

• User acquisition: Harness social media, partnerships, or referral programs to get users on board.

• Feedback loops: Pay attention to reviews and complaints. Users will tell you what’s working and what isn’t.

• Retention: Roll out updates based on feedback, keep the app secure, and add new features users actually want.

What are the best tools for payment app development?

APIs play a central part in your app’s structure. Stripe’s API allows you to integrate any Stripe product easily. Here are some of its most valuable tools.

Stripe Payments

Stripe Payments is the core feature for handling payments. It allows you to accept and process a variety of payment methods, including:

• Credit and debit cards

• Digital wallets (e.g., Apple Pay, Google Pay)

• Bank transfers (e.g., ACH Direct Debit, Single Euro Payments Area (SEPA) Direct Debit)

• Buy now, pay later (BNPL) options (e.g., Afterpay)

It’s highly flexible and can be customized for both one-time purchases and recurring payments.

Stripe Checkout

If you want a fast, safe way to implement a prebuilt payment page, Stripe Checkout is an effective option. It handles the entire payment flow, including:

• Tax calculations

• Discounts and promo codes

• Localization (supporting multiple languages and currencies)

• Fraud prevention

This is ideal if you want a solution that’s ready to go with minimal custom development.

Stripe Connect

Consider Stripe Connect if you’re building a platform or marketplace where users (e.g., sellers, service providers) need to accept payments. It lets you:

• Set up users to accept payments

• Split payments between multiple parties

• Automate payouts to user accounts

• Assist with compliance for global users

Connect is a good fit for businesses such as marketplaces, gig platforms, and any enterprise with multiple payees.

Stripe Billing

Suited to software-as-a-service (SaaS) platforms or membership-based services, Stripe Billing provides support for multiple subscription models (e.g., per-user pricing, flat-rate plans, usage-based billing).

It can help apps that handle subscriptions or recurring payments. Features include:

• Automated subscription management

• Prorated charges for plan upgrades and downgrades

• Built-in invoicing

• Retry logic for failed payments

Stripe Identity

If your app requires identity verification, Stripe Identity can help you confirm user identities with document verification and selfie checks. It’s particularly useful for assisting with compliance in industries such as finance and in marketplaces.

Stripe Treasury

Developers who want to go beyond basic payments and present features similar to those of banking apps will find Stripe Treasury invaluable. It is especially useful for fintech apps, letting you:

• Create accounts for users

• Manage cash flow

• Activate features such as wire transfers and interest-earning balances

Stripe Radar

Stripe Radar is Stripe’s built-in fraud prevention system. It uses AI to detect and prevent fraudulent transactions in real time. You can customize risk thresholds and review flagged payments manually, if needed.

Stripe Tax

Stripe Tax automates tax calculation and collection for businesses that operate in multiple jurisdictions. It supports global tax compliance and integrates with Stripe’s API to determine taxes on physical and digital products.