How do you build a peer-to-peer payments system?
Answer by Zach Abrams:
Unfortunately, this is not the easiest of tasks. I foundedapprox. 8 months ago to accomplish the exact goal you described above.
I don't have a ton on the backend side to add to Chris' answer. However, I can say, you should rely on as many third parties as possible until you've proven product-market fit. There's no sense in spending months building deep payment relationships and then seeing your platform get no traction. Integrate with us, WePay, or someone else, prove that you've found something amazing, and then invest behind unique payments relationships.
It's also worth noting, there are companies like Splitwise, Billmonk, etc. that have built everything up to (but excluding) the actual payment experience – this is another route to take depending on proposition of your idea.
Moreover, there's a lot more to building a payment system than just the processing. You're handling people's money. That means users must trust you and, in return, you have to be there to support them whenever something goes wrong. You can't just put up a splash page and start moving money (we tried and it didnt work :] ). Over time, we learned to incorporate all sorts of messaging via email, text, and in-app to help people understand the system. Copy across your entire platform is tremendously important – I can't understate the value of solid error messages and emails. We also incorporated lots of support channels, so we could help our users wherever they are – today, we have live chat, an FAQ page, email and twitter.
And even if you build an amazing system, you have to convince people to use your product (not an easy task!). Our solution is/was to focus on group treasurers and organizers on college campuses. Many people simply don't want to change how they pay – they write checks, withdraw and hand over cash, etc. It may not be convenient, but it works … so, motivating a user to change this behavior requires a herculean effort. On the other hand, treasurers face a nightmarish few weeks every semester as they collect dues – organizing a 5 person roadtrip is pretty hard, let alone handling fraternity dues for an 80 person organization. We've found these folks more willing to experiment with new technologies – and, as a result, they've been a great entry point for us into the university ecosystem.
I hope this helps. Feel free to reach out with any follow ups questions 🙂