Rumors have been around about Apple and peer-to-peer payment options even before Apple Pay debuted. Then again this summer, a patent by Apple was spotted which signaled again that this was something that the tech giant was definitely interested in.
Apple Eyeing Peer-to-Peer Payment Services
Image from Apple
Now, according to the Wall Street Journal, Apple is in talks with major banks about this very thing. The list of banks that are said to be in talks include J.P. Morgan Chase, Capital One, Wells Fargo, and US Bancorp. Missing from that list is Citi and American Express. It is said that one of the options Apple is considering involves linking a checking account for peer-to-peer payments, which would explain the absence of American Express from the list. That does not, however, explain why Citi is not mentioned.
Apple has always been about letting others pioneer certain areas of technology (they weren’t the first company to make MP3 players, smartphones, or tablets) but they are always able to enter those markets with great connections and a ready-to-go infrastructure to handle the technology. For that reason, I think that checking accounts/debit cards will just be one part of the equation. The system will likely be tied to Apple Pay which allows you to have multiple credit card accounts linked. What would be one of Apple’s chief rivals, PayPal with their Venmo system, allows the use of credit cards for these peer-to-peer payments but they put a fee on those transactions.
Could Apple Get Aggressive In A Way That Would Help Us?
Apple will have to create an alternative that will draw people into it enough to use it on a regular basis. With these other peer-to-peer payment services being on apps available on iOS, Apple will hopefully encourage their own usage by allowing credit cards and to do so at a smaller fee for the transaction. When Apple introduced Apple Pay, it was said that there were 800 million iTunes accounts – all linked to debit/credit cards.
Yet, Apple Pay cannot reach all of them yet since it is only available on iPhones released over the last year (and iPads). Couple that with reports that only 1 in 5 new iPhone users have setup their Apple Pay accounts and that says that Apple certainly does want to drive more action towards their electronic wallet option. Finally, there were surveys that showed that eligible iOS device owners had actually seen a decrease in users who had tried Apple Pay – from 15% in March to 13% in June!
What Could This Mean For Us?
What does all of that speculation mean? I am really hoping that Apple gets aggressive with this and that they either negotiate lower transaction fees (especially since they are not going to charge banks for inclusion in the program) or sweeten it in some other way that would make it a useful source of spending for credit card bonuses.
With some of the easier methods of manufactured spending drying up/dead, having access to a cheap form of hitting minimum spends right on your iPhone would be a big deal. Of course they will need an angle on how to profit from such a service. But since only newer iPhone/iPads can be used with Apple Pay (iPhone 5 models can be used in conjunction with an Apple Watch), it may be enough to create a service that will draw people to it enough to buy a device to use the service.
Whatever system Apple decides to go forward with should be available sometime in the next year according to one report, if they nail down the appropriate discussions with all those involved.
I can already hear the conversions – “Oh, did I overpay you for my share of lunch?” “Yes, but only by $3,200!” 🙂
What do you think Apple will end up doing? Will the final product be something that will be helpful to us?
