The sneaky psychology of Apple Pay – and how it could cost you or something

“Paying someone through your phone has never been easier,” Mark Wilson writes for Fast Company. “Recently, Apple announced an Apple Pay update in iOS 11 that will let you send someone cash straight through iMessage – much like you can with Venmo or Facebook Messenger. And boy, does Apple make it easy. All you have to do is select an amount and authenticate it with your fingerprint. Thanks to Apple’s thoughtful design, money flows from your bank account to someone else in moments, without a second thought.”

“Well, kind of. It doesn’t flow directly into the recipient’s bank account. It goes onto an Apple Pay cash card. Call it Apple bucks. Cupertino’s Monopoly money. The equivalent of a gift certificate. To actually collect any of the money for rent, utilities, and all those pesky things that matter, your friend will need to manually transfer it to their bank, via an interface undisclosed in the process,” Wilson writes. “It cannot be automated. In other words, Apple is making the conscious choice to sit on your money, most likely reinvesting it for millions in returns, while offering you the equivalent of a gift card for your efforts.”

“Neither PayPal nor Venmo enable auto deposits, either. But two of Apple’s closer peers, Facebook and Google, both enable auto deposits for cash sent through their systems,” Wilson writes. “[Because of the current low rate environment] here’s little to no monetary reason for Apple to withhold our funds. So why does Apple plan to do it? …Apple’s strategy with Apple Pay… transforms the $20 a friend sends you for buying lunch into fun money to be spent at Apple Pay merchants, or even better, Apple itself… But the play is really much bigger than even trapping consumer dollars as an Apple gift card. It’s about keeping those consumer dollars within the entire Apple Pay merchant ecosystem.”

Full article here.

MacDailyNews Take: In his full hit piece, Wilson laments the fact that “the average American doesn’t have very much money on hand. By one study, 53% of us can’t come up with $400 to cover an emergency expense.”

Is it Apple’s fault that 53% of Americans are irresponsible with their money? How much do you want to bet that those exact same 53% of Americans have 50+-inch HDTVs, with Xbox, Playstation, and/or Nintendo game systems attached, the attendant games, Netflix subscriptions, etc. etc. etc.?

In short, it’s not Apple’s fault that 53% of Americans forgot or never heard the timeless advice: If you don’t have the money, don’t buy it.

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That little bit that Apple can generate between the time the money is sent and the receiver transfers it to their bank account or, for the aforementioned 53% of “average Americans,” blows it on cancer sticks and scratch off tickets, covers the expense of running the service.

Interesting fact: Android’s U.S. marketshare is 53%.

Apple Pay person-to-person payments: Cupertino’s Venmo killer – June 6, 2017


    1. Yeah those $400+ wrist remotes are flying off the shelves… oh, wait.

      Being the market leader in a market that sells almost nothing doesn’t make your product successful.

      Apple’s decision to transfer $ to their own gift card is just the easiest way to avoid talking about the hit you’re going to take when you receive payment this way. Presumably Apple takes the hit as the vendor when you send $, but if the recipient wants to put that back into an account, there will be a processing fee hit on them.

      Jobs would have insisted on figuring out the whole chain before adopting it. Cook, as usual, is in a rush to bring half-baked products to compete with smaller fish.

  1. MDN fails to address the point that giving a friend who you owe money an Apple card is far inferior to being able to give cash. I thought Apple was all about user experience. This implementation shows very little regard for the user. I am a big Apple customer but I will never use this worthless feature as it is.

    1. You are not paying them with an Apple card.

      You simply use Apple Pay with your credit or debit card to send money instantly and securely, via Messages. You can request and receive money just as easily.

      1. I think his point (and one of the main points of the article) is that the sent cash doesn’t go directly to your friend (as cash.) The recipient gets the amount as credit on an Apple card, and that credit can be manually transferred to a bank account, or used directly for another transfer or to buy merchandise via Apple Pay. I would also be very surprised if Apple enables this feature for credit cards, because of the associated fees.

        All that being said, I like the feature. I hope it’s the first step in instituting a rewards program that is linked to Apple Pay.

  2. Amazing isn’t it PayPal and others set the precedent yet not a word of criticism no doubt until the desired target enters the game. Fact is of course both Google and Facebook happen to be the 2 biggest mobile advertisers and make their money from you in that fashion whereas others who don’t happen to have that facility or do not wish to impose it upon their users are at a disadvantage and thus select an alternative method to equalise the playing field. Yet that is presented as ‘mean’ and the advertising information grabbing method totally harmless apparently. You know until this hit piece I had never considered PayPal was exploiting me by not automatically downloading my money. Indeed I rather considered keeping that control in my hands as something I prefer actually for various reasons.

    1. It’s one of the numerous logical fallacies used to promote denigratory agendas.

      Here, the logical prior is the assumption (presumed to be universally understood) that Apple is obviously a large, greedy corporation famous for its sanctimony and hypocrisy. Therefore it has an ulterior motive for its every action.

      A companion fallacy and corollary is that It is up to the crusading journalist or righteous blogger to unmask such perfidy, since consumers are both irrational and helpless.

  3. Ultimately Apple Pay is going to dump its reliance on VISA, MasterCard et al, and become a credit card onto itself.

    Then, Apple earns 1+% per MONTH. On its cash horde, vs current 1+% per year.

      1. Isn’t EVERY company for customers with money and the will to spend it? What? You want Apple to be a charity? Of course they are “in it for the money”. They’re a business. Why is this an issue?

    1. @greggthruman

      I don’t think so, as that would render Apple Pay almost instantly useless. People want to use existing bank cards, especially those with rewards programs. Apple may indeed roll out its own card, but there’s no way reliance on existing bank cards will be eliminated.

  4. I like the idea, but the part where you can send a message requesting payment. Now you’re going to get inundated with Pay Me! request, which will be worse than spam because of the number of users that will pay out of fear/ignorance.

    There’s going to be IRS messages demanding payment and hey, it must be true because they have my phone number!

    Cool service that’s going to be abused right out of the gate. And since messages are encrypted, there’s no way police it.

  5. I don’t see it as sitting on the money as so much as a safety feature, preventing a software-engineered or socially-engineered hack so that all your funds can be hacked and drained.
    So I think this is a smart extra step in the middle to keep your account from being sucked dry.

  6. If your bank’s transfer feature supports and uses the Zelle technology, you can transfer instantly to another’s bank account as long as both of you are setup to use external transfers on your mobile banking app. And it is instant, not 1-3 business days to wait like Venmo. Why wait if you can do that, and you also do not have to manually transfer the funds. And it’s free to boot if you use a checking account.

  7. What is missing from the discussion so far is…
    Apple only holds your money until you spend it via Apple gift card – no fee taken for this service, or transfer it to your bank where fees will be taken.
    How is that not a good thing?

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