Apple May Develop Service For Person-to-Person Payments
Apple is reportedly developing a person-to-person (P2P) payment service, according to The New York Times. P2P services allow consumers to send money to others as easily as sending a text message. Currently, there are a number of other providers in the market, including PayPal’s Venmo, Square Cash, Facebook Messenger and SnapCash.
Banks are also developing P2P payment products. About 80% of all banks, including Bank of America, BB&T, Capital One, JPMorgan Chase, U.S. Bank and Wells Fargo, are using a mobile banking app called clearXchange to offer safe, peer-to-peer payments.
Consumers, particularly Millennials, are taking advantage of these person-to-person services. Square Cash has processed more than $1 billion transactions since its program started two years ago, and Venmo processed almost $2.4 billion in 2014 alone.
Even though consumers are using the service, companies are not generating much income from P2P transactions. For example, if a customer links a checking account to a Square Cash or Venmo account, the transactions are free. If consumers use a credit card, they are charged a 3% fee.
Companies like Apple and Facebook are primarily interested in offering P2P services because it gives consumers another way to use their products. For Apple, this new service could allow consumers to leave their physical wallets at home and start using their Apple Wallet. Apple Pay adoption has been slow, and the company has been looking for ways to encourage Apple Pay use. According to the latest PYMNTS and InfoScout Apple Pay Transaction Tracker, Apple Pay is only being used for about 5% of eligible transactions.
An anonymous source said Apple’s P2P service could be ready next year.