Apple Taps Into P2P Payments with iOS 11
This week, at their annual Worldwide Developers Conference (WWDC) in San Jose, Apple confirmed rumors that they would begin offering their own peer to peer payment option called Apple Pay Cash. This puts the company in competition with the likes of FinTech apps Venmo and Square Cash, which have proven popular among Millennials. It also ties-in nicely with Apple’s previous mobile payment breakthrough, Apple Pay.
Although the big selling point of Apple Pay Cash is how it works right in iMessage, in actuality, it’s not as simple as typing in how much you want to pay someone and hitting “send.” Instead, you must first set up your Apple Pay Cash Card that will reside in your Wallet along with other Apple Pay cards. With the money on your card, you can send money to others, transfer it to your bank account, or spend it at retailers that accept Apply Pay. One downside as noted by Recode is that, while adding money via a debit card will be free, a 3% fee will be assessed to credit card transactions (to be fair, this is in line with competitors).
Speaking of competition, the integration of iMessage and Apple Pay Cash is what clearly sets Apple’s P2P offering apart from apps with similar functions. Not only does this feature make it easier to send money to friends without having to open an additional app but Siri will also be able to detect when money is being discussed in conversation. When this happens, the Apple Pay Cash icon will move to the front of your iMessage app drawer and the amount discussed will load by default. Of course, before any transaction is complete, Touch ID is employed to verify your identity.
With the introduction of Apple Pay Cash, the company once again shows their knack for taking what is already a growing trend and improving upon it. For example Apple didn’t invent the idea of mobile payments, yet once Apple Pay launched, many heralded it as a major step toward mainstream acceptance of the technology (whether it’s actually reached that point yet is debatable). In many cases Apple’s ability to upgrade the offerings of competitors comes merely from building it directly into their iOS ecosystem — something others simply can’t do nearly as effectively.
What will be interesting to see is if Apple’s take on P2P payments leads to a rise in the medium. As mentioned, studies have shown as many as 26% of Millennials utilizing such payments, while those in other generations lag behind. For older adults or even Millennials who have yet to get on board with apps like Venmo, perhaps the already-built-in (to a degree) nature of Apple Pay Cash will remove a major barrier to adoption.
Another possible scenario is that this new feature will drive use of regular Apple Pay. After all, it stands to reason that many will find spending their card balance at retailers directly simpler than transferring it back to their bank. In that aspect, P2P and contactless payments could grow in tandem, raising the profile of mobile payments overall.
Nearly 10 years after first introducing the iPhone, Apple continues to improve what may now be their flagship product (sorry, Mac). While their latest ideas may not be as innovative or groundbreaking as they once were, the company’s ability to see what consumers want and deliver it in the best way possible remains intact. With that, expect Apple Pay Cash to be a hit and hopefully increase mobile payment and FinTech adoption across the board.