Apple has revealed that it will be unveiling a peer-to-peer money-transfer service which will allow users of the iPad, Apple Watch and the iPhone to send money electronically to each other using a text message. Other firms offering this kind of service include Venmo, PayPal, Chase QuickPay and Square Cash. Apple’s money-transfer service will be appearing in iMessage.
In order to use the service which will be launched in fall, a credit card or a debit card will have to be added since it will be the source of funding to the Wallet app. When backed by a debit card, there will be no fee for the money transfer but when credit card-backed, users will incur a fee of 3%. This is the same rate that rivals charge.
Unlike the products from rivals such as Venmo or Square Cash, Apple’s money transfer service does not indicate the reason behind a payment. This could, however, be a privacy issue since Apple has been more insistent on this issue than any other technology company.
One advantage that Apple has over rivals such as Square Cash and Venmo is that it doesn’t have to establish a peer-to-peer payments network as the network already exists in iMessage since the people one will most likely be paying are the same ones one is chatting with. This fact alone will also ensure that Apple’s peer-to-peer payments emerges as one of the easiest to work with.
One unique feature of Apple’s P2P service is that it will have a reminder asking users to pay owed amounts to friends. Some users might however find it rude.
Apple’s entry into the peer-to-peer payments space is likely as a result of the potential that lies ahead. A study conducted by Javelin Strategy and Research shows that users of peer-to-peer payment services in the United States was at 69 million two years ago but by 2020 will have increased to 126 million. By 2021 it is expected that one in every two consumers in the U.S. will be using peer-to-peer apps.
Apple’s peer-to-peer payment service, which will be available on the upcoming iOS, is believed to be a way of enticing and introducing more of its customers to Apple Pay. In the United States Apple Pay is currently accepted in around 5 million locations and by the time this year ends, it will be available at over 50% of the retailers. It is also the leading mobile-based contactless payment service.