The ins and outs of splitting payments

From dining out to paying rent, dividing expenses can be confusing, tedious, and sometimes even awkward. That might explain the growing popularity of payment splitting apps.

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

Bill splitting tips

Looking to split the cost of a bill? You could consider these tips:

• Use a bill splitting app. A payment splitting app can help make it easy to divide expenses, track payments, and send reminders. These apps typically allow you to split bills for various scenarios, such as a restaurant bill, rent, utilities, or holiday expenses. Just make sure everyone has downloaded the app and properly set up their account to send and receive funds.
• Settle up fast. If you're splitting the bill with friends, it's a good idea to divide the expense, request the money, and settle up quickly. Waiting too long to request payment might lead to confusion and misunderstandings.
• Be upfront. Make sure everyone is clear about the costs before you split the bill. Consider discussing whether or not you will split the bill evenly (such as rent for a two-bedroom flat) or based on usage (such as for electricity).
• Don’t be shy to send reminders. Many payment splitting apps, let you send reminders to help ensure everyone has paid their share.

How split payment apps work

The process may vary depending on the app used, and it’s always important to understand any terms and conditions before deciding to split payments.

Here’s a breakdown on how typical split payment apps work:

1. Create a payment request.
2. Invite friends to join the split with their mobile number or email address.
3. Calculate how much each person owes based on payment details provided.
4. Each person in the group can then pay their share directly through the app using their linked payment method.
5. Once everyone has paid, the split can be closed and the money will be distributed to the person who paid the bill.

Potential benefits of bill splitting apps

Potential benefits of using a bill splitting app to send or request money include:

• Quick and seamless reimbursement. Bill splitting apps can make it easy to reimburse expenses, whether you're splitting a restaurant bill with friends or sharing the cost of utilities with roommates. With normally just a few clicks, you can send and receive payments directly through the app.
• Determine who owes what. Bill splitting apps can make it easy to determine who owes what. They often do the calculations, so you don't have to spend time figuring out how much each person is responsible for.
• Convenience. Typically, a payment splitting app provides a record of all transactions, which can be helpful for tax purposes or for keeping track of your personal finances.
• Reminders and notifications. Many apps offer reminders and notifications to help you stay on top of your expenses. Automatic reminders can be used to notify you when payments are due, which can help you avoid late fees and missed payments.
• Increased security. Transactions are usually encrypted and protected by various security measures to help protect users’ information.

Considerations when choosing a split payment app

There are many split payment apps on the market, each with potential benefits and drawbacks.

Consider the following:

• Functionality. Depending on the individual’s needs, some may look for apps that offer real-time exchange rates (if there’s a need to split expenses between currencies), the ability to work offline, and fast and secure payment options and transfers.
• Compatibility and integration. Generally if the app is available for iOS, Android, and other web-based platforms, it’s likely anyone can use it. Some apps also integrate with other apps and services, such as banking apps, expense trackers, or messaging apps.
• Bill splitting options. Determine if the app provides varied options for splitting a bill, such as even splitting or customising to a person’s usage.
• Payment methods. Does the app support different payment methods such as cards, bank transfers, and mobile wallets?
• Easy to use. Ask yourself if the app is intuitive and easy to navigate.
• Fees. Some payment splitting apps have fees, so it’s critical to understand any costs associated with splitting a bill or requesting money.
• Customer support. Reliable, responsive customer service is important in case a payment issue or concern arises.