“Silicon Valley is obsessed with a particular part of the finance business that involves sending cash to friends using an app,” Olga Kharif reports for Bloomberg. “That’s led to a flurry of options that often aren’t profitable because they charge little to no transaction fees. PayPal and its subsidiary, Venmo, are among the most popular, though they face a growing list of competitors, including Google, Facebook, and Square.”
“Apple plans to get in on the action, too,” Kharif reports. “The world’s most valuable technology company has been talking with banks about introducing its own feature to Apple Pay that will allow users to send money to friends, a person familiar with the plans told Bloomberg last month. If Apple hopes to compete, it will also need to make its service free to use with debit cards, according to analysts.”
“Person-to-person payment services aren’t cheap to operate, and Apple may lose money on many transactions, said research firm Crone Consulting,” Kharif reports. “Apple isn’t likely to find a way to profit directly from the feature. Instead, the company will probably use it to increase adoption of Apple Pay in stores… Adding the ability for owners of newer iPhone models to send each other money could double usage of Apple Pay by those customers in 18 to 24 months, said Richard Crone, chief executive officer at Crone Consulting. That could be a moneymaker for Apple, which charges banks fees each time customers tap their phones to pay in stores. ‘Apple is hoping to stem the tide of slow adoption for Apple Pay with user-funded incentives for P2P payments,’ Crone said. ‘If I send you $50, and you are not on Apple Pay P2P service, you have to enroll in it. It’s a viral application.'”
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MacDailyNews Take: If you haven’t already, you will use Apple Pay.
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