The person-to-person payments market has become increasingly competitive as consumers gain more options for quickly sending and receiving money through their smartphones. Apple Pay Cash brings Apple directly into the P2P payments market, offering functionality similar to established services while integrating payments into the apps and features iPhone users already use every day.
That integration could become one of Apple Pay Cash’s most important advantages. Rather than requiring users to open a separate P2P app, Apple can recognize payment-related conversations in Messages and make it easy to send or request money directly. Support through Contacts and Siri further reduces friction, potentially helping Apple turn ordinary conversations about splitting meals, tickets, and other expenses into immediate P2P transactions.
The options for person-to-person (P2P) apps is getting crowded. Tech Crunch provided a thorough review of Apple’s Apple Pay Cash solution which has begun a limited, soft launch. Its functionality as described in the article seems to mirror that of the many other P2P options:
The source of funding is any debit or credit card you have currently added to Apple Pay. Apple will charge no fees for money that is funded via debit cards and an ‘industry standard’ fee for credit cards, likely in the few percent.
The first time someone sends you money, you will opt in to accept it and be issued a new virtual Apple Pay Cash card. This card can only be used to send money or pay for things via Apple Pay, so it’s not a completely discrete “credit/cash card”, but it functions as one as long as you’re within Apple Pay. The reason for the card is multi-faceted, but one big one is that this allows Apple to fund payments to the card immediately. This means that when you get paid via Apple Cash, you’re going to be able to spend that money right away as long as it’s via Apple Cash to someone else or via Apple Pay at a retailer or website that accepts it.
You can only use this product with other U.S. customers operating iOS devices on versions 11.2 or later and also with two-factor authentication set up. So it’s not ubiquitous, but that is still a big population of potential users. What this product has that others do not, beyond the fact that it is APPLE, is the way it prompts for potential P2P transactions contextually that will no doubt drive transaction volumes:
Sending and receiving works pretty much as you’d expect. If you ask for money in a text, say ‘hey you owe me $10 for movie tickets’, the other party can tap on the underlined dollar amount and send it. You can also use the Pay Cash app in Messages to send a formal request, they’ll see that and can tap to pay. When they send it you’ll get a notification and you tap on that to accept the money. You can choose to automatically accept payments or not in settings. The first time you use it you’ll have to accept the money within 7 days.
You can also send money directly from the Contacts app in iOS by tapping a contact and then the $ icon below their name. Siri, of course, is also involved and you can use it to send money or request money from a friend. Saying “ask Sally to pay me $10 for breakfast” will send that message via Messages and they can tap and pay.
Apple Pay Cash enters a crowded P2P payments market without fundamentally reinventing how consumers send money to one another. Its limitations—including its dependence on compatible Apple devices and availability only to U.S. users at launch—could prevent it from achieving the ubiquity of services that operate across platforms.
However, Apple’s ability to embed P2P payments directly into Messages, Contacts, Siri, and the broader Apple Pay ecosystem could distinguish the service. By making payments a contextual part of everyday interactions rather than a separate task, Apple Pay Cash could encourage greater P2P payment usage among iPhone owners and strengthen Apple’s broader mobile payments ecosystem.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
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