A lot of talk in the mobile payments industry in recent years has been about the ways in which people could be enticed to adopt these purchasing platforms and start using them more regularly in their everyday lives. The work in this area hasn’t been easy, but headway has been made slowly but surely with a large and growing number of options into the market. Now, it seems that Apple could release a new feature for its own entry that may help entice many consumers to start using these platforms regularly.
Rumors are now beginning to circulate that Apple could add a person-to-person payment service to Apple Pay or a new platform that would be linked to the existing one, according to a report from the Wall Street Journal. This would create yet another entry into the P2P payment ecosystem, which already has entries from Square, Google, PayPal, Facebook, and more. Right now, it appears that Apple is in talks with banks to allow this type of transaction, mirroring discussions it had both before and after launching Apple Pay in 2014.
What does the current system look like?
It’s believed that Apple is trying to take a page from PayPal’s popular personal payments platform, Venmo, the report said. That entry to the mobile payments market was introduced in 2009, but caught on far more recently, particularly with millennials who use the service to transfer money for things like bills. This comes in addition to the fact that the largest portion of P2P transactions (49 percent) are still going through PayPal. Another 5 percent happen through Venmo, and 6 percent through competitor Square.
In addition, 39 percent are funds transfers through online banking, while 20 percent go through mobile banking, the report said. But last year, when it came to mobile transactions exclusively, 46 percent went through mobile banking, but 19 percent were via Venmo, compared to just 10 percent on Square.
What’s Apple’s end-game?
What’s perplexing to experts right now is how Apple intends to make money on P2P transactions, the report said. However, some say it might not intend to make any money on them at all, and is simply leveraging this kind of payment option as a means of getting people to simply think of their iPhones as one of the best and easiest ways to handle their various financial transactions from purchases to transfers, and more.
While Apple is not currently close to unveiling this service, it did receive a patent for one earlier this year, and has been in talks with JP Morgan Chase, Capital One, Wells Fargo, and U.S. Bancorp, among other major financial institutions, the report said. The platform will likely be launched in 2016.
This is just another way in which mobile payments are likely to become the norm in the next few years, and with major participation from both tech and banking giants, companies might want to take the time now to get invested in utilizing this type of technology.Back To Blog