Peer-to-Peer (P2P)
Quick Answer
Peer-to-peer (P2P) refers to a direct transaction or exchange of funds, services, or data between two parties without an intermediary or central authority.
Definition
Peer-to-peer (P2P) refers to a direct transaction or exchange of funds, services, or data between two parties without an intermediary or central authority.
Explanation
In finance, P2P encompasses payment services like Venmo, Zelle, and Cash App that allow individuals to send money directly to each other. P2P lending platforms connect borrowers directly with investors, bypassing traditional banks. P2P technology is also fundamental to cryptocurrencies and blockchain networks.
P2P transactions are typically faster and cheaper than traditional bank transfers because they eliminate intermediary fees. However, they may have less fraud protection than traditional payment methods.
Example
Two friends split a dinner bill using Venmo — one sends $35 directly to the other's Venmo account, and the money is available in their bank account within 1-2 business days.
Frequently Asked Questions
What is Peer-to-Peer (P2P)?
Peer-to-peer (P2P) refers to a direct transaction or exchange of funds, services, or data between two parties without an intermediary or central authority.
How does Peer-to-Peer (P2P) work?
In finance, P2P encompasses payment services like Venmo, Zelle, and Cash App that allow individuals to send money directly to each other. P2P lending platforms connect borrowers directly with investors, bypassing traditional banks. P2P technology is also fundamental to cryptocurrencies and blockchain networks.P2P transactions are typically faster and cheaper than traditional bank transfers because they eliminate intermediary fees. However, they may have less fraud protection than traditional payment methods.
Can you give an example of Peer-to-Peer (P2P)?
Two friends split a dinner bill using Venmo — one sends $35 directly to the other's Venmo account, and the money is available in their bank account within 1-2 business days.