What sources of funds can be used for peer-to-peer Apple Pay?
Apple Pay Cash is being introduced in the US first, with iOS 11.2 and watchOS 4.2 betas.  Both parties in a peer-to-peer transaction must have a suitable version of the software and have signed up for Apple Pay Cash.

Cash can be sent from a linked credit card (which incurs a 3% fee) or debit card.

Received cash is stored in an Apple Pay Cash card in Wallet.  It can be used for purchases or sent to a bank account.