Apple’s entry into peer-to-peer payments took a major step forward with the launch of Apple Pay Cash, giving consumers another way to send and receive money digitally. Integrated directly into Apple’s Messages app, the Apple P2P payment service allows users to transfer money through familiar Apple devices, including the iPhone, iPad, and Apple Watch. The tight integration could make P2P payments particularly convenient for consumers already immersed in the Apple ecosystem.
However, Apple Pay Cash entered a competitive market where services such as Venmo, Square Cash, and Zelle had already established significant user bases. Apple’s restriction to its own devices could also limit its reach compared with services that work across multiple operating systems. Still, Apple’s ability to combine P2P transfers with Apple Pay and a stored prepaid balance gives the company an opportunity to make person-to-person payments part of a broader digital payments experience.
Apple’s P2P service, Apple Pay Cash, is now up and running. Business Insider provides a step-by-step accounting of how to set up and transact with the new service and some background on the launch:
On Monday, the company launched Apple Pay Cash. The feature allows users in the United States with an up-to-date iPhone to send money to other iPhone users through the company’s Messages app.
A direct competitor to other digital cash apps like Venmo and Square Cash, Apple Pay Cash was first announced in June, at Apple’s annual developer’s conference. It was originally supposed to launch with iOS 11, the latest version of the operating system underlying the iPhone, which Apple released in September. But the company delayed its launch until the release of iOS 11.2, which the company made available over the weekend.
Unlike its competitors, Apple Pay Cash doesn’t work on Android devices. However, you can send payments using the service via an iPhone, iPad, or an Apple Watch.
Business Insider characterizes Apple Pay Cash as a “Venmo Killer”, which remains to be seen. Although Apple Pay Cash users may find the Apple P2P service very convenient to use through iMessages, Venmo has a significant earlier-to-market lead, has already captured millions of users and will deliver transactions regardless of the sender’s or the recipient’s device operating system.
Apple, like Venmo and Zelle, offer the opportunity to spend funds received through the P2P service to make purchases. Apple accomplishes this through the use of virtual prepaid accounts managed through Green Dot’s GoBank. This account will store funds that can be used to fund Apple Pay transactions. Alternatively, P2P balances can be directed back to the user’s bank account.
The launch of Apple Pay Cash demonstrates how Apple can use its control over hardware, software, messaging, and payments to create a highly integrated P2P payment experience. Allowing consumers to retain received funds for Apple Pay purchases or transfer the money to a bank account also gives the service functionality beyond simply sending money between individuals.
Whether Apple Pay Cash can challenge established P2P services will depend largely on consumer adoption and the value users place on that integration. Venmo and other competitors have important advantages, including established networks and broader device compatibility, but Apple’s enormous installed base gives its P2P payment service a substantial platform from which to grow.
More details on Apple Pay Cash from Apple can be found here.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
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