P2P (Peer to Peer) Currency Exchange Trends for Fintech Developers

Driven by the growing global marketplace and the high exchange rates of banks, Fintech startups are disrupting yet another financial service sector: P2P currency exchanges. By connecting buyers and sellers of currencies without banks handling the transactions, these fintechs are carving out a nice niche for themselves. Not only do they attract customers with their lower fees, but many also offer a greater range of options than banks ever considered.

Typical of how willing investors are to fund Fintech software development for this market, Proxy Ventures has received around €20 million in funding, while rival TransferWise boasts $58 million in Series C funding in 2015 alone. Although fintechs have attracted more investment dollars in other sectors, this emerging market represents potentially high returns for developers who can move quickly.

It is early, yet, to see just where innovation might lead this industry. We can, nevertheless, identify some trends that will drive software development in this market for the foreseeable future.

1. Automatic Currency Exchange Software

Despite economic downturns affecting just about every country on the planet, the digital marketplace isn’t doing so bad. As more customers purchase more products and services from offshore vendors, geographic lines become less important. What is increasingly important for many customers is that they get the best exchange rates possible when they make a purchase. Sometimes this means timing.

As foreign exchange rates vary over time — sometimes from one minute to another, the need to make an exchange during a more favorable rate can mean significant savings on large purchases or currency exchanges. Peer to peer currency exchange software that incorporates automatic exchange features will allow customers to wait until the exchange rate meets a pre-defined criteria before making the exchange. The exchange will then be made automatically.

Sophisticated currency exchange applications will allow the customer to set criteria for any number of currencies.

2. Digital Currency Exchange Platforms

The rise of digital currency was inevitable. In a world where everything that can be replaced with a digital facsimile either has been or will be, currency is no exception. Whether Bitcoin maintains its lead as the de facto form of digital currency, or if rival currencies ultimately prevail, it is pretty safe to say the number of digital currencies will only increase. The emergence and global acceptance of a single world-wide currency would probably nullify all other forms of currency — digital and otherwise, but that’s a whole other story. Till then, the trend toward virtual money will continue.

As more digital currencies appear on the scene, so too will the need for companies to facilitate exchanges between different digital currencies, and between digital and fiat currencies. In the digital currency ecosystem, the formation of digital currency exchanges was as inevitable as the digital tender they handle. Although some companies have started offering digital currency exchange services, opportunities are plentiful for innovative developers.

3. Financial Software Integration

Progressive fintech companies know how to network. Unlike traditional financial service providers, fintech startups boldly go where no one has gone and often partner with their own competition. While some fintechs exist to develop stand-alone financial services, many opt to integrate new products and services with the legacy platforms used by conventional financial service providers.

The willingness of both fintechs and standard service providers means opportunity for developers working in the P2P currency exchange space. But the reason might not be obvious.

Consider a typical peer to peer currency exchange transaction. Regardless of the currencies involved, an exchange represents a financial transaction for which each participating party must account in his or her financial records. Further, as the exchanged currency is used to make a purchase, there is an additional need to update the books to reflect the purchase. Herein lies the opportunity.

As P2P currency exchanges become more prevalent, there will be an increasing need to integrate exchange platforms with accounting programs, eWallet, payment gateways, POS systems, and other standard applications. Innovative developers eager to develop custom solutions in this space would do well to explore integration as a growing niche within the larger growing market.

4. Cloud-Based Exchange Platforms

Industry forecast experts agree that cloud-based services will continue to trend, with spending on the public cloud infrastructure expected to reach $173 billion by 2026. Investment in Software as a Service platforms, along with SaaS market revenue, will also continue to grow.

What this means for developers working on P2P currency exchange applications is a shift from traditional deployment methodologies. For those wishing to stay ahead of the technology curve, it will only make sense to create their exchange platforms in the cloud, and, possibly, to offer them as subscription services.

Of course, along with cloud-based solutions comes the need for solid data security. The advanced nature of modern cyber security technology means some fintechs will not have the skill set inhouse to secure their cloud-based applications. Those that do not must either onboard an expert, or outsource the security of their P2P currency exchange platforms.

5. Social Media Capability

It should not be surprising that any peer-to-peer platform would take advantage of the ultimate P2P network — social media. And so it is with P2P currency exchanges.

P2P currency exchanges rely in great part on the trustworthiness of both parties involved in making the exchange. Except when one party is a well-known commercial enterprise, some parties will seek ways to verify how well the other party can be trusted to complete the exchange as expected. By creating a social media tie-in, exchange software can allow one party to view the social media profile of the other prior to accepting them as a “match.”

The example given is just one way social media can be used alongside peer-based currency exchange platforms. Since this sector of the fintech ecosystem is in its infancy, many other uses for social media in P2P currency exchange applications will surely emerge. The innovative developer will not wait to see what those may be, but will create them.

How Ignite Can Help?

Success in the competitive P2P currency exchange software market requires three things: theory, technology, and timing.

The theory is your idea for a new product or service. You have a vision that just might be the next Big Thing. In fact, you are betting everything that you are right.

Next, you need the technology to turn your vision into a marketable reality. For that, you need us. Ignite operates six R&D labs across Europe, which allow us to provide your outsource technology solutions no matter the complexity, no matter the budget. Our diverse teams have a proven track record in mobile app development, gaming and entertainment, auto technology, security, and cloud technology, to name a few.

As for timing, that’s up to you. But every minute wasted is a minute sooner your idea could reach the market. Why not contact us now for a free consultation?

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