Apple expanded the functionality of its digital payments ecosystem by adding Mastercard debit cards as an option for Apple Cash Instant Transfer. The change gives Apple Cash users another way to move funds immediately from their balance to a bank account rather than waiting the one to three days typically required for an ACH transfer. Mastercard joins Visa, which was already supported for instant transfers.
The expansion comes as Apple continues to build more functionality around Apple Cash, which can be used for person-to-person payments, purchases through Apple Pay, and receiving Daily Cash rewards from Apple Card. Apple Cash Family has also extended the service to younger users within a household. At the same time, Apple increased its Instant Transfer fee, potentially giving customers another reason to leave funds within the Apple ecosystem rather than immediately transferring their balances elsewhere.
9to5 Mac reported that Apple Cash users can now use the Instant Transfer feature with Mastercard debit cards. Apple Cash can be used for purchases and for person-to-person transactions. Apple recently launched Apple Cash Family, allowing users to share funds with kids.
Adding Mastercard for transfers is not difficult, particularly for a tech firm like Apple, so it makes one wonder if the delay in adding the Mastercard option (they have had Visa in place for a while) was due to contractual concerns, not technical. In addition to adding Mastercard access, they also increased the fees, trying to give users more of an incentive to keep their money with Apple.
Here’s the scoop from the article:
In an email sent to Apple Card users on Thursday, Apple says users can now transfer money from their Apple Cash balance to a bank account using a Mastercard debit card and Instant Transfer. Previously this was only possible using a Visa debit card. With Instant Transfer, the money is sent immediately to your bank, so you don’t have to wait until the transaction is processed.
The company is also changing some Apple Cash terms and conditions with today’s update. Most notably, the company will now charge 1.5% (previously 1%) for transfers made with Instant Transfer. There will be a minimum fee of $0.25 and maximum fee of $15 per transaction. These changes will take effect from August 26, 2021.
Those who don’t want to pay any fees for sending money from the Apple Card balance to a bank account can use ACH transfers. However, this method takes from one to three days to add the money to your account.
With Apple Cash, users can easily send and receive money to friends and family through iMessage. The service is also integrated with Apple Card so users can receive Daily Cash. All the money in an Apple Cash account can be used in stores through Apple Pay.
It’s worth noting that Apple Cash is currently exclusive to the US
Adding Mastercard debit cards to Apple Cash Instant Transfer makes the service more flexible and removes a limitation for consumers who want immediate access to their funds. It also demonstrates how Apple continues to incrementally expand Apple Cash from a P2P payments feature into a more integrated component of its broader financial services ecosystem.
The higher Instant Transfer fee, however, creates an interesting incentive. Consumers can pay for immediate access to their money, wait for a free ACH transfer, or keep their balance within Apple Cash for purchases and additional payments. As Apple adds more ways to use those funds, retaining money within its ecosystem could become increasingly attractive.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
