Apple Pay Cash debuts with latest iOS update
- Apple added its person-to-person payment service, Apple Pay Cash, to the latest version of its mobile operating system, according to The Verge. The feature lets U.S. users send and receive money through iMessages, similar to Paypal's Venmo, Zelle or Square Cash. The values are stored on a digital card in the Wallet app and can be used for spending anywhere that accepts Apple Pay.
- After setting up Apple Pay Cash in an iPhone or iPad, users can add money to their digital card with debit or prepaid cards that are linked to their Apple Pay account, per an Apple support page. Users can also "cash out" and transfer money from their Apple Pay Cash digital card to a bank account in Wallet.
- The iPhone maker released iOS 11.2 on Saturday — earlier than planned — in order to fix a software bug, The Verge reported. The payment service release was delayed in September, along with Messages in the Cloud and AirPlay 2, which have yet to roll out.
Apple's new P2P feature is an added convenience for mobile users who now don't need to rely on a third-party app like Venmo or Zelle to make digital payments to friends or in stores. Money can be sent directly through iMessage, keeping users within the Apple ecosystem and helping to reduce friction by minimizing the number of accounts users need for mobile pay transactions.
The move suggests Apple is looking to ramp up the development of mobile payment services and is betting on its large user base to help it do so, as iPhone owners are known for being early adopters of new tech. Apple isn't standing still as competitors ramp up mobile pay efforts of their own. Recent deals include Chipotle and McDonald's adding Apple Pay to order-ahead services in select locations, as well as Apple Pay services rolling out to all Saks Fifth Avenue, Albertsons and Dick's Sporting Goods stores in the U.S.
Apple also said in October that retailers like Safeway would soon roll out Apple Pay. Starbucks, a pioneer in retail mobile payment apps, also uses Apple's mobile payment system. Users of Apple Pay have more than doubled in the past year and annual transactions have risen 4x, Apple said in an earnings call in November.
Overall, the $49 billion mobile payment market has faced some difficulty gaining traction among consumers, in part due to security concerns and the relative ease of using plastic cards to pay for items. Instant P2P payments are very common in countries like China, where some urban areas are nearly cashless. The U.S. has been comparably slow to introduce and adopt the technology, but the banking system is getting on board to avoid losing market share to fintech services that have been readily adopted by millennials.
The global P2P mobile payment market is expected to grow 40% to $540 billion in 2017 from a year earlier, according to a Juniper Research forecast. Digital payments were forecast to rise 14% to $3.9 trillion for the same period, the researcher said.