A pattern for enabling direct financial transfers between parties using blockchain infrastructure to reduce costs and increase accessibility
Context
Peer to peer payments represent a fundamental reimagining of how value moves between individuals and organizations, particularly across geographic and institutional boundaries. This pattern serves contexts where traditional financial infrastructure creates barriers through high costs, slow settlement times, restricted access, or censorship risks.
The pattern applies most powerfully in situations involving international transfers where multiple intermediaries typically extract fees and add delays. Organizations supporting communities in politically restricted contexts find traditional banking systems may block or scrutinize legitimate transfers. Grassroots initiatives in regions with limited banking infrastructure struggle to receive support from global funders. Emergency response situations require rapid fund deployment that traditional systems cannot accommodate.
Implementation contexts share characteristics including need for transparency in fund flows to build stakeholder trust, requirements for lower transaction costs to maximize beneficiary value, time-sensitive delivery where days matter, and operations across multiple currencies and jurisdictions. As blockchain infrastructure has matured, peer to peer payments have evolved from experimental technology to practical tools for specific use cases where traditional systems fail to serve community needs.
Challenges
Traditional international payment systems create compounding barriers that particularly impact social benefit organizations and the communities they serve. Transaction fees accumulate at each step—sender bank fees, intermediary bank charges, currency conversion costs, and recipient bank fees can consume 10-15% of transferred value. For small grants that communities need most, these fees become proportionally devastating, sometimes exceeding 25% of the transfer amount.
Settlement times in traditional systems range from days to weeks, creating cash flow challenges for recipient organizations. A grant approved on the first of the month might not reach its destination until the twentieth, forcing organizations to bridge gaps through expensive local credit or delay critical activities. These delays compound in emergency situations where rapid response determines intervention effectiveness.
Access restrictions present perhaps the most fundamental challenge. Many communities globally lack basic banking infrastructure. Even when banks exist, documentation requirements exclude individuals without formal identification or fixed addresses. Political restrictions add another layer—legitimate human rights organizations may find their accounts frozen or transfers blocked by financial institutions avoiding regulatory risk. These systemic exclusions perpetuate inequalities by preventing resources from reaching communities that need them most.
The opacity of traditional systems creates additional trust and coordination challenges. Senders cannot verify when funds arrive or what fees were extracted. Recipients have limited recourse when transfers disappear into banking bureaucracy. Multi-stakeholder initiatives struggle to maintain transparency when each participant uses different banking systems with incompatible reporting. The lack of transparent, accessible financial infrastructure undermines collaborative efforts and reduces stakeholder trust.
Solution
Peer to peer payments leverage blockchain infrastructure to enable direct value transfer between parties without traditional intermediaries. This approach transforms international transfers from opaque, multi-step processes into transparent, direct transactions that can be verified by all stakeholders.
The pattern implementation begins with establishing blockchain wallets for participating parties. Unlike bank accounts requiring extensive documentation and approval processes, basic blockchain wallets can be created by anyone with internet access. This immediate accessibility opens participation to previously excluded communities, though it also requires careful attention to security and user education.
Value transfer occurs through blockchain networks using stablecoins—cryptocurrencies designed to maintain steady value relative to traditional currencies. Stablecoins eliminate the volatility concerns that make other cryptocurrencies unsuitable for grant-making. Transactions process in minutes rather than days, with fees typically under $1 regardless of transfer size. All participants can verify transaction completion and exact amounts received through public blockchain records.
The critical innovation lies not in the technology itself but in how it restructures power relationships in financial transfers. Recipients gain direct access to global funding networks without requiring approval from local financial institutions. Funders can verify their support reaches intended destinations without fee extraction. Communities can demonstrate transparent fund usage to build trust with supporters. Multi-stakeholder initiatives can coordinate resources through shared visible infrastructure.
However, successful implementation requires addressing the “last mile” challenge—converting blockchain assets into locally usable resources. This pattern therefore includes developing local exchange relationships where recipients can convert stablecoins to local currency, identifying merchants who accept direct blockchain payments, creating community funds that manage conversion for multiple recipients, and building networks of blockchain-literate community members who can assist others.
The solution acknowledges that technology alone cannot solve systemic financial exclusion. Rather, peer to peer payments provide tools that communities can adapt to their specific contexts, creating new pathways for resource flow that complement or bypass traditional systems as needed.
Implementation Considerations
Implementing peer to peer payments requires careful attention to technical, regulatory, and social dimensions. Organizations must navigate complex considerations while maintaining focus on community benefit rather than technological sophistication.
Regulatory Compliance
The regulatory landscape for blockchain-based transfers varies dramatically across jurisdictions and evolves rapidly. Organizations must understand requirements in both sending and receiving countries. Key considerations include Know Your Customer (KYC) obligations for different transaction amounts, tax implications of cryptocurrency transfers, licensing requirements for money transmission, and reporting obligations for international transfers. Many organizations find that partnering with compliant service providers reduces regulatory complexity while maintaining benefit access.
Technology Selection
Multiple blockchain networks support peer to peer payments, each with distinct characteristics. Ethereum provides extensive infrastructure but higher fees. Alternative networks like Polygon or Optimism offer lower costs with good stablecoin support. The choice depends on recipient location infrastructure, stablecoin availability, integration with other blockchain services, and long-term sustainability. Organizations should prioritize networks with strong adoption in recipient communities over technical sophistication.
User Experience Design
The gap between blockchain capability and user readiness represents the primary implementation challenge. Successful implementations invest heavily in user experience, creating simple interfaces that hide technical complexity, developing training materials in local languages, providing hands-on support during initial transactions, and establishing help networks for ongoing assistance. The goal is making blockchain transfers as straightforward as possible while maintaining security.
Last Mile Infrastructure
Converting blockchain assets to locally useful resources requires extensive ground-level coordination. Organizations must map local exchange options including cryptocurrency exchanges, peer-to-peer trading networks, merchant acceptance, and banking integration where available. Building redundant options increases resilience. Some implementations create community funds that handle conversion centrally, reducing individual complexity while maintaining transparency.
Risk Management
Peer to peer payments introduce new risks requiring active management. Security risks include wallet compromise, phishing attacks, and user error in transactions. Volatility risks exist even with stablecoins during conversion periods. Regulatory risks may emerge as governments adjust to blockchain adoption. Implementations must include security training for all participants, multi-signature wallets for large amounts, clear procedures for handling errors, and contingency plans for regulatory changes.
Examples & Case Studies
Equality Fund Web3 Exploration (2024-2025): Equality Fund partnered with Women Win and SuperBenefit to explore blockchain for feminist grant-making. Initial assumptions about high transaction costs between major organizations proved incorrect—established banking relationships already minimized fees. The real challenges emerged at last-mile delivery where local banking restrictions and infrastructure limitations created barriers. Key insights included the need for hyper-local context understanding beyond country-level analysis and recognition that innovation requires dedicated resources rather than additional duties for operational staff.
Ukraine Humanitarian Response: During the 2022 crisis, blockchain payments enabled rapid humanitarian support when traditional banking systems were disrupted. Some Ukrainian cities had sophisticated cryptocurrency infrastructure enabling direct aid delivery. Other regions lacked basic exchange services, requiring creative solutions through merchant networks. This demonstrated both the potential and limitations of peer to peer payments in crisis contexts.
Global Grassroots Support Networks: Various informal networks have emerged using blockchain for direct community support. Environmental defenders in restricted contexts receive sustaining funds through cryptocurrency. Artist communities transfer value across borders for collaborative projects. These implementations often operate below regulatory radar while demonstrating practical utility for excluded communities.
References
Peer to peer payments represent a rapidly evolving pattern with extensive technical documentation but limited systematic analysis of social benefit applications. Practitioners must navigate between cryptocurrency enthusiasm and skeptical dismissal to find practical applications serving real community needs.
Technical foundations include various blockchain networks (Ethereum, Polygon, Optimism), stablecoin protocols (USDC, DAI, USDT), and wallet infrastructure (MetaMask, Rainbow, Argent). Each component requires evaluation for specific implementation contexts.
Related patterns that complement peer to peer payments:
- Privacy payments: Enhanced privacy for sensitive transfers
- Impact attestations: Documenting outcomes from funded activities
- Token based governance: Creating stakeholder participation in fund allocation
- Participatory governance: Enabling community control over received resources
Organizations implementing peer to peer payments should engage with emerging practice communities including the Open Money Initiative documenting cryptocurrency use in restricted contexts, GiveDirectly’s cryptocurrency programs providing direct implementation experience, and various Web3 social impact networks sharing practical knowledge. As regulatory frameworks evolve and infrastructure matures, peer to peer payments will likely become standard tools for specific use cases while traditional systems continue serving other needs.
Examples & Case Studies
Equality Fund Web3 Exploration (2024-2025): Equality Fund’s experiment with peer to peer payments revealed critical insights about assumptions versus reality in blockchain-based grantmaking. Partnering with Women Win (their fiscal sponsor managing $30 million annually) and SuperBenefit, they designed an A/B testing framework to compare traditional banking with blockchain solutions for their international feminist grantmaking across 85 countries.
The discovery phase examined five potential Web3 applications before focusing on grant disbursement infrastructure. Initial hypothesis centered on reducing transaction costs—widely cited as a primary blockchain benefit. However, systematic analysis revealed surprising findings: transaction costs between Equality Fund and Women Win were already minimal due to established banking relationships. The assumed problem didn’t exist at the institutional transfer level.
The real friction emerged at the last mile of delivery. Women Win’s seven-person finance team regularly dealt with bounced payments, varying bank requirements, and complex documentation needs. Local banking systems in recipient countries created the actual barriers—political restrictions on women’s rights organizations, lack of rural banking infrastructure, and scrutiny of human rights funding. These challenges suggested peer to peer payments might be valuable for direct transfers to grant recipients rather than between major organizations.
Critical insights emerged about implementation prerequisites. The team discovered that “country-level analysis was insufficient” with infrastructure varying dramatically between cities and communities within the same country. Some Ukrainian cities had sophisticated crypto infrastructure while nearby regions lacked basic banking. This hyper-local variation was invisible in their initial planning.
Organizational constraints proved decisive in preventing full implementation. All participating staff balanced experimental work with full operational duties, leading to work that “kept starting and stopping.” Without dedicated innovation resources, operational priorities consistently superseded experimentation. The team reflected they “would have done this as a Design Sprint… in one week” with concentrated effort rather than distributed partial attention over nine months.
Despite not completing blockchain transactions, the experiment generated valuable learning about prerequisites for peer to peer payment adoption: need for hyper-local infrastructure mapping, requirement for dedicated innovation resources, importance of direct recipient engagement (limited by safety constraints), and recognition that solving last-mile delivery challenges matters more than institutional transfer optimization.
All In For Sport Funding Evolution: While AIFS didn’t implement peer to peer payments during the RPP experiment, their transformation journey highlighted similar challenges around resource flows. Moving from an NFT-funding model to coordination infrastructure, they faced the fundamental question of how to sustainably fund coordination work that enables others to create value. Their partnership developments (Women Win, Tech365) suggested future potential for blockchain-based resource flows between network participants, particularly for rapid deployment of resources for emergent opportunities.
Ukraine Humanitarian Response (2022-ongoing): During the 2022 crisis, blockchain payments enabled rapid humanitarian support when traditional banking systems were disrupted. Some Ukrainian cities had sophisticated cryptocurrency infrastructure enabling direct aid delivery. Other regions lacked basic exchange services, requiring creative solutions through merchant networks. This demonstrated both the potential and limitations of peer to peer payments in crisis contexts.
Global Grassroots Support Networks: Various informal networks have emerged using blockchain for direct community support. Environmental defenders in restricted contexts receive sustaining funds through cryptocurrency. Artist communities transfer value across borders for collaborative projects. These implementations often operate below regulatory radar while demonstrating practical utility for excluded communities.