How to Create an Online Payment Apps

The online payment ecosystem is extensive and can be daunting for a new business owner.

Payment app development assists businesses in offering their customers an easy and efficient means of making and receiving digital payments.

Custom payment apps provide full functionality for money management, accommodate all necessary payment methods and currencies, ensure high-level security of customer's personal and payment information, and can be easily upgraded with new functionality.

This article will provide all the information you need to know about how to create an online payment app​, including key features, technologies, and development approaches.

Keep reading for a deeper dive and expert advice to learn valuable insights and actionable advice.

What is an Online Payment App?

An online payment system, sometimes also an "online payment process" or an "online checkout system," is an encompassing term for all forms and processes that transfer money between parties in e-commerce businesses.

It includes all technical and non-technical processes applied to facilitate such transfers. The range of cashless payment systems available to choose from is wide.

Payment on invoice (23.8%) and PayPal (29.6%) are two of Germany's most widely used online payment systems. Nevertheless, mobile payment using digital wallets is gaining increasing popularity.

Online payment systems offer businesses and consumers an easy, fast, and secure payment method.

Furthermore, information about customer buying habits can be examined, making offers more tailored to their requirements.

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How Does an Online Payment System Work?

Before knowing how to create an online payment app​, here's a bit more description of these parts of cashless payment systems online for small businesses:

1. Payment Gateway

An intermediary between the card companies and the payment processor. The payment gateway takes charge of the back-end technical parts of transferring cardholder data to make the purchase quickly and securely.

2. Payment Processor

A third party is responsible for handling the card transaction process. The payment processor will notify your customer's card information to your bank and their own bank, subject to them having sufficient funds in the account. The payment will be made

3. Merchant Account

Companies utilize a bank account to process credit/debit card payments. You cannot process these kinds of payments without a merchant account, so start-up companies should sign up for an account as soon as possible.

All three components of your online payment system work together to execute the entire transaction from start to finish, transferring the money out of your customer's bank account and into your business's merchant account.

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What are the Types of P2P Payment Apps?

P2P refers to peer-to-peer, which means one person making a monetary transaction to another person directly, without needing intermediaries like banks or credit card companies.

Here are the four main types of P2P Payment Apps:

1. Standalone Platform

It is a PayPal-like payment system with its own money transfer payment gateway to enable transactions. This type provides full-featured wallet functionality to assist end-users in storing, sending, and withdrawing funds.

PayPal and Venmo complete the list of the top standalone platforms serving >200 countries and 300 million users transferring money daily.

2. Bank-centric System

It refers to a peer-to-peer payment system built by a banking organization to streamline how users can make payments.

Zelle is the most widely used bank-focused P2P payment application designed by major US financial institutions such as Bank of America, Trust, Capital One, JPMorgan Chase, etc.

3. Social Media-centric Platform

Facebook Pay, Snapcash, and WhatsApp are some leading social media-focused systems.

They imply that users can directly remit funds from within the social media apps by linking their bank account or debit/credit card.

4. Mobile OS Focused System

This category of peer-to-peer payment system has Apple Pay and Google Pay as the best examples. Mobile OS-centric systems indicate those payment service providers embedded directly within your iOS or Android phone.

Creating payment gateways for P2P, make it easy and fast for users to make payments and reduce the cyber threat dangers on the level of the operating system.

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What are the Advantages of Online Payment Apps?

What do you believe is the reason behind the dominance of mobile app payments like Paytm, Freecharge, PayPal, Mobikwik, and Google Pay in the digital payment sector?

Why do most banks possess personalized digital wallets like Axis Bank Lime, ICICI Pockets, SBI Buddy, etc.?

The reason lies in the convenience and security it holds for cashless transactions. Here are a few benefits of knowing How to create an online payment app:

1. Cashless Transactions

With the online transaction app, you don't have to travel with debit/credit cards or cash. All you have to do is just tap your phone to pay or scan a QR code to purchase things you're buying.

2. Highly Secure

For cash, if you lose it, there is almost no way to recover it. When you misplace your credit or debit card, you must notify each lender to cancel the card and provide a new one.

In the case of a digital payment app, your personal information like pins, passwords, and biometrics are secured by the third-party provider, and even if you misplace your device, you can still access it when you acquire the new device.

3. Can be Used in Multiple Stores and Online Transactions

E-wallets are widely accepted in most places, such as shopping apps, hotels, travel booking sites, and other online transactions. The number of retailers providing payment access this way continues to grow yearly.

4. Authorized Transactions

For payment transactions, you should enter a PIN to enable device payment. Devices should have fingerprint authentication to support biometric authentication and enable payment proceedings.

Authorization gives security from fraudulent online purchases and identity theft. Mobile payment apps have benefits like Exciting Rewards, Budgeting, and Quick Fund transfers.

Let's consider its market size to better understand why it's a wise choice to develop an online payment app like UPI or Google Pay.

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How to Create an Online Payment App​: Step-by-step Guide to Develop an Application for Payment Transactions

Developing an online payment app such as Paytm can appear to be a daunting endeavor.

Still, through a straightforward procedure, you could develop an application that is useful to users and competitive in the market.

Here is the payment app procedure for development in a step-by-step guide:

Step 1: Research and Define Your Goal

First, look at the market and find out what is already in the market. Identify the gaps and consider how your application can improve or make things differently.

Step 2: Partner with a Bank and NPCI

In order to use UPI for payment, you'll need to collaborate with banks and register with the National Payments Corporation of India (NPCI). This allows you to integrate your application into the UPI infrastructure.

Step 3: Choose the Right Technology Stack

Select the appropriate technology to develop your app. Technologies such as Java, Kotlin, and Swift are suitable for a secure, scalable app.

You can also leverage frameworks such as Flutter development for quick development across platforms.

Step 4: Design a User-Friendly Interface

Ensure your app is user-friendly. A simple, clean design and seamless experience will ensure users continue to use it.

Step 5: Develop Core Features

Your app must have basic features such as sending money and paying bills, as well as robust security to ensure the safety of user details.

Step 6: Integrate Payment Gateway and Security Protocols

The second step is implementing NPCI-approved payment gateways and ensuring secure encryption to secure all transactions through your app.

Step 7: Test the App Thoroughly

A thorough software testing is necessary for bugs and issues. Addressing any issues early on guarantees that your users have a seamless experience.

Step 8: Launch and Market the App

After completing your app, collaborate with a fintech application development company to launch and promote it. Emphasize the best parts of your app to draw users in and inform them why it's a wonderful option among other mobile payment applications.

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Must-Have Payment App Features in 2025

1. Digital Wallet

It's a core part of your P2P payment system because it allows end-users to store, transfer, request, withdraw, and recharge funds.

Integration of VISA and Mastercard payment tokenization services is necessary because these vendors support most countries and banks. These services offer out-of-the-box functionality for your app users, saving you money on peer-to-peer development.

2. Send & Request Funds

Users of a payment app undertake two major operations – sending and requesting money from other users.

Due to this fact, it becomes a necessity for your app to have a strong payment gateway integrated that will process transactions securely and at lightning speed.

3. Send Bills/Invoices

Most organizations and individuals prefer asking for a bill/invoice transaction to ensure that the sender has executed the money transfer operation.

Therefore, you need to include and provide users with an effortless bill/invoice generation feature supporting the most common formats, such as PDF, email-based, and in-app.

Also, provides an easy mechanism to share the generated invoices and bills with the recipient with a single click ease.

4. Convert Currencies Automatically

Your P2P payment app won't become worthwhile and popular unless it includes an automated currency conversion feature.

Spending on goods and services in a foreign country, sending money overseas, shifting funds to cards denominated in another currency, and so forth have become options available to users with automated currency conversion.

You should technically add your peer-to-peer payment app to exchange rate APIs, which will enable you to manage automatic conversions at the point of every transaction.

5. Unique OTP and IDs

72% of companies reported seeing various types of cybersecurity threats in 2018, as per the KMPG reports. They are phishing, DDoS, vulnerability exploits, and spam actions that disrupt the stability of more than 100,000 end-users.

These figures imply that you must keep a close eye on the safety of your payment gateway application.

One-time passwords (OTP) and special IDs that must be entered by the user with the specified frequency come to your rescue. One of the safest and least distractive ways is asking for an OTP per login and transaction session.

In the case of unique IDs, they work in a similar way, but you can request end-users to save and store their identifier once during their account creation. This implies that hackers have no opportunity to obtain a unique ID from the client side.

6. Bank Account Transfers

Most users must send money to bank accounts, not just cards. Offering card-account transactions enables you to remain competitive since this feature is a necessity. This is how banking apps work as well.

Therefore, don't deprive your end-users of bank account transfers and satisfy the needs of any size.

7. Transaction History

Transaction history assists end-users in reconciling their inflows and outflows and monitoring their account balance. Attempt to provide users with access to as much information as possible.

In order to be differentiated from competitors, users should be offered deep filters such as custom date ranges, smart sorting, etc.

Also, allows customers to print and download statements, convert transaction history to PDFs, and share via several apps and messengers.

8. Push Notifications

A win-win approach for your payment gateway app. You can send new updates, releases, promotions, and offers. Two, end-users can receive notifications of the account's receipts, debits, credits, and other activities.

Make it a feature to choose the types of push notifications customers want to receive in the settings so that you can prevent annoying them and retain them on board.

9. Messaging

Users will need to frequently add comments and information to their money transfers, so don't deprive them of this capability.

Add the chat feature to your payment gateway application and make it possible for users to chat with others while making transactions.

If you have a chat application, creating a payment gateway will also prove to be a wonderful feature for your end-users to send money there and then.

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Key Technologies & Tools Required for Digital Payment App Development

To build an application for payment like Paytm, you’ll need a few key tools to make sure it works smoothly and stays secure. Here’s what you’ll need:

1. Mobile App Development Framework

When we talk about the framework for mobile app development, there is always a debate about native vs hybrid app development.

• Native apps are constructed specifically for Android or iOS. They're fine but must be developed independently for each.
• Hybrid apps such as React Native or Flutter can run on both Android and iOS. They're quicker to develop but might not be as silky as native apps.

2. Backend Technologies

This is where your app’s data is stored. You’ll need cloud services like AWS or Google Cloud to run everything and databases to manage user details. Tools like Node.js or Python help everything run without any problems.

3. Payment Gateway Integration

Your app needs to connect to payment services like Razorpay or Paytm. These payment gateway integration services help transfer money safely and make sure everything is secure.

4. Security Protocols

Keeping user data safe is super important. You’ll use encryption to protect personal info and follow security rules like PCI-DSS to keep payments safe and secure.

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What are the Best Mobile App Payment Platforms?

Here is an online payment app list to use in India:

1. Paytm
2. PhonePe
3. Google Pay
4. Freecharge
5. BHIM UPI

What Factors Determine the Online Payment App Development Cost?

Now that you know the payment app procedure for development, let’s move on to some of the major factors that affect the development cost.

Mobile wallet app development requires certain factors and considerations from the end-user perspective. The below-discussed elements decide the real cost of creating an app similar to PhonePe:

1. App Platform (Android, iOS, or Windows)

The expense of a PhonePe clone app is mostly based on the mobile platform on which we will implement the app.

The expense will really go high if we decide to implement it on both cross platforms—Android and iOS. You should be aware that iOS app development is more than Android app development.

An iPhone device has a lot of testing processes, which is time-consuming and hectic.

2. App Features and Size

The development cost of an app like Gpay or PhonePe depends on the fundamental and advanced features created in the mobile or web application.

If you wish to include several features and functionalities in the mobile wallet app, the same needs to be larger since the cost of development depends on the size of the app.

3. User Interface

The price of native or hybrid app development, such as PhonePe, also differs based on the type of UI/UX design patterns chosen for app design purposes.

Easy-to-use, good-looking, and catchy designs are likely to lure customers. A better-looking user interface is more expensive and requires ample money and time.

4. App Developers

The online payment app development price also varies based on the size of the development team, location, project manager, experience of the developers' team, and expertise in the respective field.

5. Type of Technology Used

Digital payment applications such as PhonePe and Paytm have secure and advanced features for attracting and safeguarding the user's data from hackers and scammers.

Additionally, the price also varies based on the technology used. Nowadays, newer technologies such as Blockchain in banking and Cloud are used to develop apps.

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Cost of Developing an Online Payment App

The estimated cost of development is based on factors like features, platform, and the location of the development team. Following is a rough estimate for online payment app making charges:

What Are The Ways to Monetize Your Payment Gateway App?

Just knowing how to create an online payment app​ isn’t enough; if you’re investing in creating such a large-scale application, it’s necessary to know how to make a profit off it as well.

As a business owner, your primary objective is to earn profit from developing and selling a peer-to-peer payment application.

Here are three primary app monetization strategies for your money transfer application:

1. Charge Per Feature

One of the fundamental business models is charging per feature. What this implies is that you give certain basic functionality for free but have paid plans.

They should have additional features that people are willing to pay for since this functionality addresses their particular needs.

For instance, you can give users advanced analytics features and a clever balance moneybox that will automatically round up around 0.1% of every transaction and save it outside the user's balance.

2. Charge App Fees

This monetization strategy implies that you take a fixed fee per every transaction such that users receive net payments.

It is an excellent but forceful business model that might distract some users as they've already decided on a certain amount to transfer.

Moreover, refund and chargeback situations shouldn't cost extra because most users think it's unfair behavior. However, you can have flexible payment gateway app charges that are fantastic for both your business and clients.

3. Charge Per Usage

This approach is like the revenue share and app fee models but suggests charging users for excessive account activity and not charging them per transaction.

This strategy is perfect if you process and tally the monetary value across a certain amount of time for every user.

After that, you can charge clients on an interval basis. Utilizing a charging platform that per-usage auto-charges for your business will get simpler.

Wrapping Up!

Finally, we have covered all the aspects of how to create an online payment app​.

Developing an online payment app like Gpay, Paytm, and more needs a well-planned strategy, from market research and feature identification to selecting the proper technology stack and compliance with security standards.

With this article's step-by-step guide, you can develop a secure, scalable, easy-to-use payment app that adheres to industry norms.

Furthermore, if you require professional mobile app development company’s assistance, contact Arramton Infotech. Our ios and Android app development services will ensure you get a highly-scalable and profitable mobile application.

Frequently Asked Questions

Q. How can I monetize my payment app?

Ans. Monetization options are transaction charges, subscriptions, ads, and merchant tie-ups.

Q. Can I launch a Paytm-like app globally?

Ans. Yes, but you must comply with country-wise financial regulations such as GDPR (Europe), PCI DSS (US), and RBI norms (India).

Q. Which is the best application for payment to use in India?

Ans. Some of the best and most popular mobile app payment platforms are Razorpay, PayU, PayTM, and PhonePe that you can use in India.

Q. Can I integrate blockchain for enhanced security?

Ans. Yes, blockchain can add security by offering decentralized and tamper-proof transactions.

Q. How long does it take to develop an app like Paytm?

Ans. It usually takes 6-12 months, depending on team size and complexity.

Q. Do I need a banking license to operate a mobile wallet?

Ans. Yes, if you provide a prepaid wallet, RBI regulations mandate a Prepaid Payment Instrument (PPI) license.

Q. How Do I Make a Payment App Like Phonepe?

Ans. To develop a payment app like Phonepe, you must have developers and designers who can design a friendly interface. You must also collaborate with banks and payment gateways to make transactions.

Q. How Much Does it Cost to Create a Payment App?

Ans. The price of developing a payment app will depend on different aspects, including the app's complexity, the functionalities you would like to have, and the team you employ for development. Yet, the price can be anything from a few thousand dollars to several hundred thousand dollars.