How to build a seamless Stellar peer-to-peer payments app

Blockchain technology remains a niche interest in the developed world. However, the benefits of frictionless cross-border payments are increasingly apparent in regions that lack effective financial services. Blockchain financial use cases such as cryptocurrencies were the first applications of the technology. Unsurprisingly, they continue to be the most compelling. As the world globalizes and the demand for cross-border payments increases, and the global south will drive innovation in blockchain payments.

Peer-to-peer mobile payment apps may leapfrog banks altogether in countries with corrupt and inadequate financial markets. We believe a Stellar blockchain P2P mobile payments system using lumens as a bridge currency will deliver greater financial freedom. It will allow users to transfer money for a fraction of the cost of traditional remittance services.

This post outlines a technical proposal for how we envision a P2P mobile payments application.

Growing demand for blockchian financial use cases

According to a 2018 Migration and Remittances report from the World Bank, remittance inflows to low and middle-income countries hit a record $528 billion USD last year. India topped the list of remittance receiving countries at $80 billion. China ($67b), Mexico, The Philippines (both $34b) and Egypt ($26b) followed. Meanwhile, the USA, GCC countries, and the Russian Federation are the top remittance sending countries.

Migrants seeking better opportunities in wealthier countries drive the demand to send some of the profits home. Currently, however, many rely on banks or expensive money transfer services to send and receive funds. Dillip Ratha, chief economist at the World Bank wrote in a blog post that average remittance fees are nearly seven percent, more than double the Sustainable Development Goal (SDG) of three percent. He cites de-risking practices by banks, as well as exclusive partnerships between national post office systems and money transfer operators as factors keeping fees high.

These fees disproportionately affect the people who can least afford to pay them. Blockchain technology can enable direct, P2P payments with fees lower than three percent and keep profits where they matter most — to expats and their families back home.

Our solution

Just as India China, and Mexico top the list of remittance receiving countries, they also have the highest numbers of unbanked citizens, The Times of India reports. Combined it’s almost 500 million people. These countries are ripe for technical solutions that can skip banks altogether. A P2P mobile payment system is one of many blockchain financial use cases we believe would be beneficial for all the parties involved. Let me outline why.

First, users can set up an account on an existing mobile device. In many parts of the developing world, mobile infrastructure is far more widespread and in many cases more advanced than in the developed world. The global south benefits from a lack of legacy technology and entrenched interests. Users may be more mobile-savvy than their western counterparts. A mobile application also offers a convenient way for users to send and receive funds for everyday transactions.

In addition to setting up a convenient account, the fees to send and receive funds on the app would be far lower than current rates. Stellar blockchain transactions commit far faster than Ethereum or Bitcoin and have far lower transaction fees. Of course, the company itself may choose to charge a transaction fee to make a profit, but the costs that drive up traditional money transfer services don’t apply.

Fast and safe transactions

We decided to propose the Stellar blockchain because of its fast and secure transactions. As a bridge currency for crypto payments, it would outperform other token systems such as Ethereum or Bitcoin. In addition to providing faster payments, the system will not suffer some of the latency issues that plagued other blockchain financial use cases.

Of course, with any cryptocurrency-based transactions, there are considerable risks involved in securing private keys and handling crypto wallets. Any platform that hopes to attract widespread adoption should stress upon users that securing private keys should be vitally important. Nevertheless, we remain confident that since the widespread use of mobile devices in the developing world is already developed, this application will not be difficult to master.

Getting the tokens into the hands of users and then converting to and from fiat currency is a challenge to address as well. We envision an ecosystem cropping up that will help users on both ends of the transaction that convert fiat to tokens and then vice versa on the other side.

Good UI/UX will go a long way to build trust in the platform and help users secure their funds in the system. A simple, yet secure software wallet on the application will help users store their funds and exchange them for fiat.

Technical architecture

From a technical standpoint, this is how the application will work. First, a user requests some point of sale — let’s call him Issuer 1 to swap fiat currency to the app’s native tokens. When Issuer 1 accepts a local transaction the request to the so-called “Central Bank” is sent. It will start the transaction to transfer tokens to the end user’s wallet.

In the next step, Issuer 1 and Receiver 1 both receive a response with the transaction status from the Central Bank. At this time we can get two types of statuses. First – the backend system may fail to generate a blockchain transaction. Second – the transaction is accepted and is in progress. When the Central Bank verifies that the request is successful, then it will start the transaction on the Stellar blockchain.

The Central Bank will start to transfer coins from the Central Bank’s Wallet to Wallet 1. We have to remember that the Central Bank can transfer coins from his wallet to other wallets in the ecosystem at any time. The same process is available for receivers and issuers. When the transaction is finished both the receiver and issuer receive information about status: either success or error.

Our solution is suitable for everyone in the ecosystem who has active wallets. We can transfer funds to others fast and easily. As with other blockchain financial use cases, all the information about transactions is saved on the Stellar blockchain and is visible to the central bank. Each user can view the status of his transaction in the Payments Explorer user interface.

Backend and blockchain layer

Our proposed mobile payments system consists of two main components. It will have a backend and a blockchain layer on top. A robust backend handles all the non-blockchain transaction such as:

  • Ordering the exchange of traditional currencies
  • Communication between the point of sale and the Central Bank
  • Communication between the client and the central bank

Meanwhile, the Stellar blockchain layer that we propose will enable fast, highly scalable mobile transactions. This will be able to handle an ever-increasing pool of users. The main responsibilities for the Stellar blockchain layer are:

  • Transfer of assets (coins) from the central bank’s wallet to the users

  • Direct transactions – transfer of assets between wallets of users

Mobile payments improvement

Based on traditional IT architecture, our blockchain-enabled app enables us to achieve high scalability, data dispersion, and customer ownership to the accumulated good on your own portfolio.

The Stellar blockchain in combination with mobile payments eliminates expensive third parties from the transaction, passing savings on to users and their families abroad.

Mobile application and payments explorer

Our mobile application allows users to transfer funds in the form of Stellar tokens directly from wallet to wallet. Please note that the platform can use other coins in the payments ecosystem. However, few other coins offer such scalability advantages as well as low transaction fees.

Stellar includes a tool that allows you to search for transactions carried out on the network. With this, users can verify the history of transactions and remittances. This is a very simple way to monitor blockchain activity. Above are a few examples of Payments Explorer’s user interface.


Blockchain-enabled P2P mobile payments have the potential to extend financial services to large swathes of the world’s unbanked population. In regions of the world that receive remittances from loved ones in wealthier counties, applications that make it faster and cheaper to send money puts more profits in the hands of people who will benefit most.

Of all the blockchain financial use cases, seamless cross-border payments promise the greatest impact for the developing world. As more and more people seek better economic opportunities abroad, the demand for alternative money transfer services only grows. A stellar mobile payment application in the hands of millions of users may cut out middlemen, drive innovation, and improve lives.

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