Peering is when two Internet networks connect via Internet Service Providers (ISP) and exchange traffic directly without having to pay for a third party to carry the traffic.
Peering ensures a direct route for data to travel between the two networks. This results fast data transfer as well as reduced latency. Peering is possible through physical interconnections via Internet Exchange Points (IXP) or private direct links.
Peering can be public through shared facilities involving multiple ISPs or private through direct connection of two ISPs.