When Initiating a Payment, you can either enter the phone number of the recipient, select and already existing contact or a group. Contacts are individuals that are already stored in your account as payment recipients. Whenever you enter the phone number of a new payment recipient when initiating a transfer, they are automatically stored as a contact for any future payments.
A group is multiple contacts organized efficiently into a list. For example, you may have 10 Employees that you pay on a regular basis. Storing them as Contacts will let you easily create payments to them in the future. If a group of these employees all get paid the same amount, you may want to organize them into a group. When initiating a payment you will be able to pay all of these employees by simply selecting the Group they belong to.