Apple launched its person-to-person (P2P) payments service, Apple Pay Cash, riding on top of Apple’s iMessage, thereby joining a long list of other tech companies who also offer P2P, including PayPal, Square, Venmo, Facebook, Google, SnapChat, Zelle, PopMoney, and several others. With this service, Apple is hoping to generate new P2P users in a demographic that typically shied away from P2P apps more popular with younger users, and possibly spur increased use of Apple Pay, the tap-to-pay capability of iPhones and Apple Watches.
But Apple Pay Cash faces several obstacles. For example, Zelle, a P2P offering from a few credit unions and big banks, which allows payments to be directly sent from and deposited into bank accounts (versus Apple’s version which leaves received money in an Apple Pay Cash account) will be launching a multi-million-dollar marketing blitz this quarter. Also, Venmo, a P2P app wildly popular with millennials and Gen Z, has been experiencing double and triple digit growth, moving over $9 billion among Venmo users in just the last quarter. On the surface there doesn’t seem to be any incentive for a Venmo user who is also an iPhone user to switch over to Apple Pay Cash, leaving behind their network of friends and family who already subscribe to Venmo.
Unique features of Apple Pay Cash
Despite its competition, Apple Pay Cash does have some unique features. The funding source to send money is any card already loaded into Apple Pay, giving Apple Pay Cash an already existing base of potential users with existing cards. There are no charges for using a debit card, and a 3% fee for using a credit card.continue reading »