Why Apple wants to get into the unprofitable world of payments between friends

“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.'”

Read more in the full article here.

MacDailyNews Take: If you haven’t already, you will use Apple Pay.

Apple reaches agreement to bring Apple Pay to China, sources say – November 25, 2015
Apples’ revolutionary Apple Pay expands to Canada and Australia – November 17, 2015
Apple is making a grab for Venmo’s P2P payments turf and might use iMessage to do it – November 13, 2015
Apple discussing mobile person-to-person payment service with major U.S. banks – November 11, 2015


  1. Because when you can exchanged funds between friends, digitally, securely, and efficiently, it will sell more phones. Apple is in the business of selling hardware. All services are value add-ons for that reason.

  2. “Slow adoption”? Huh. I use it more and more every month.

    There are businesses out there that take Apple Pay that don’t even seem to know it. I was being silly at a restaurant and holding my iPhone up to a credit card terminal that didn’t show any sign of accepting contactless payments. To my surprise, my iPhone lit up and I was able to use Apple Pay to pay the bill. Since then, I’ve always tried my phone at least once at every new place I’ve shopped at.


  3. The new chipped credit cards are a NIGHTMARE…..I have had my card two months and already the chip is bad and reads card error in the terminal.
    So I have ordered a replacement and become more vocal with merchants in requesting Apple Pay…….the merchants are already complaining about chipped card problems and the length of time added to the register transactions….

    Apple Pay once you start using it you will NEVER want to go back to the swipe and/or insert CC nonsense!!!!

    1. We’ve had chipped cards (with PIN) for over half a decade now. Carry 3 chipped cards now (2 credit, 1 debit), and none of their predecessors died before the card expiry forced a card replacement.

      They’re not indestructible of course, but neither should they be that delicate.

      But yes, waiting for Apple Pay here…

    2. Can’t say I’ve had any problems with my new chipped cards… yet!

      However, I can’t say I’m a big fan of them so far. I accept they are more secure, but the transaction takes ridiculously longer to go through than a swipe.

      Worthwhile trade off, I suppose, but it sure is aggravating.

  4. Who’s this bozo, just because he can’t see it, well it must be doomed. P2P is going to be a thing and is used by more and more people and countries, especially the under banked. That’s why banks are having such a cow about it now, trying to shut it down. Go Apple!

    1. Who’s this bozo? He doesn’t like someone else and then makes a speculative claim about the future. I wish you could hear yourself. Are you looking for your 15 seconds of fame by saying, “I called it!” or something?

  5. ‘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.’

    If you try to pay me with a method I can’t accept, you’re an ass. I don’t think this is Apple’s plan, as it would only generate a lot of, “yeah he tried to pay me with that stupid apple pay thing.”

      1. Or just not use Apple Pay. You know, I think we all know what is easier. Leave it to geeks who think that changing your bank because they don’t (yet) support Apple Pay is the answer, as if that bank had NO OTHER benefits. I haven’t read a better example of tech stupidity today, but it’s early yet.

  6. In Sweden we have been using chip + pin cards for many years without problems. Transaction fees are lower, so merchants by and large prefer card transactions to dealing with cash, even when buying items worth less than one dollar.

    Most bills are paid via direct bank transfer, which can be arranged online or via invoice, so most people have never needed to pay anything by check.

    In 2012 a number of banks collaborated to create a mobile payment app and platform, which has made personal transfers very convenient: http://www.thelocal.se/20121219/45172

    We don’t have Apple Pay yet, but I am looking forward to it.

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