P2P payments are becoming popular as a way to send and receive money. Because they are made directly between two individuals, there is no need for a third-party processor, such as a bank or credit card company. This means that P2P payments can be processed very quickly, often in just a few seconds. Additionally, P2P payments can be made using a variety of methods, including text message, email, and even social media. This makes it easy to send money to anyone, regardless of location.
Apple is rolling out a P2P service through its Messages service. Finextra outlined that some of the product features which includes the ability send and receive funds using the card rails, the option to use Siri to launch a transfer, plus the ability to store funds in an account that can then be used to make purchases with Apple Pay:
The new feature enables users to send money and get paid right in Messages, or tell Siri to pay someone, using the credit and debit cards they already have in Wallet.
When users get paid, they receive the money in a new Apple Pay Cash account. They can use the digital cash instantly to send to someone, make purchases using Apple Pay in stores, apps and on the web, or transfer it from Apple Pay Cash to their bank account.
This offering looks a lot like Venmo, except Apple Pay is much more widely accepted than the few merchants that current accept Venmo as a form of payment. There are a few features that appear to be less robust than others in the market. Unlike the other major P2P service, Zelle, the cash out feature, meaning the ability to transfer funds from a P2P service to a bank account takes days not seconds and not surprisingly, Apple’s P2P service works only with other Apple devices. The adoption of Apple’s service will be based on the strength of its brand to expand to this financial service and the willingness of consumers to use multiple P2P services.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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