Apple Said To Eye Mobile P2P

If at first you don’t succeed, try P2P.

Apple is reportedly planning a mobile P2P payment service that would compete with the array of other players in the space who enable that service, including PayPal’s Venmo, Square Cash, Facebook Messenger, SnapCash and the list goes on. This comes courtesy of several news outlets, including The Wall Street Journal and The New York Times.

And, of course, the banks want to — and do — offer their own P2P services.

What’s not been discussed yet is how.

No one’s saying if Apple and those banks have a deal worked out or at what stage the talks have progressed. Those missing puzzle pieces would be how Apple would integrate the bank’s existing infrastructure into the P2P service, how immediately those funds are available and how much it will cost.

What the infamous “sources close to the matter” say is that the service would work very much like others do — consumers have options to send payments from their bank accounts to another person via Apple Pay. The service could launch in 2016.

The banks reportedly involved in the talks with Apple about this service include JPMorgan Chase, Capital One, Wells Fargo and U.S. Bancorp. 

Remarkably, the same list as those who are part of the P2P payments service, clearXchange, which was acquired by Early Warning a few weeks back. Sources also say that Apple may be contemplating the use of clearXchange to power the service, since it already has the bank connections. That service enables users to link to their checking account and send money using an email address or cellphone number. 

What also remains unanswered is how Apple would monetize the service, not that it has to with $260 billion+ in the bank. More likely, Apple is looking for ways to get consumers into the habit of using their Apple Pay accounts since Apple Pay engagement is so low.

The latest PYMNTS and InfoScout Apple Pay Transaction Tracker shows usage plateauing at about 5 percent of all eligible transactions, meaning those with an iPhone 6 in stores that accept Apple Pay.

Apple’s potential move into the P2P space comes at a time when the space is heating up with Silicon Valley neighbors also wanting their part of the trend. Google, Square and Facebook also offer P2P payments, and Venmo has grown quickly. PayPal’s most recent figures about Venmo showed that users made $2.1 billion in mobile payments via the service in its third quarter, more than double the amount of the $700 million the year prior. 

Venmo is particularly attractive with the millennial crowd given its ability to keep track of payments on a social media feed that can be shared with friends. This helps with cases like rent payments, shared bills between roommates or a shared dinner check. 

Sending and receiving money through Venmo is free, but there’s a fee for credit cards (3 percent) and some debit cards. Venmo is, according to PayPal, viewed as a loss leader for other mobile payments services.

To check out what else is HOT in the world of payments, click here.