Auf Wiedersehen is really formal. Between friends you say "Tschüss" or "Tschö" - the last one is non-standard/slang. Auf Wiedersehen between close friends seems to be quite old-fashioned and sounds quite more "sarcastic", when used. However, there can be some situations, when you use Auf Wiedersehen between friends. I would rather use "Bis zum nächsten Mal" as a similar greeting to my friends (has actually the same meaning).