Apple Pay Eyes PayPal’s Venmo With This New Payment Method
Craig Federighi, Apple’s vice president of engineering, said on Monday that the new payments service, which is linked with Apple’s mobile wallet Apple Pay, will let users send money directly to their contacts using the technology giant’s popular messaging app, iMessage.
The service essentially replicates Venmo, the PayPal-owned payments app that has become enormously popular among a younger crowd to make small, cashless transfer, such as paying a friend for dinner, using a phone.
These payments are frequently referred to as peer-to-peer payments. Forrester Research estimates that the total peer-to-peer payments payments market will reach $17 billion in transaction volume by 2019.
Venmo has been seeing massive success with its growing service. In the first quarter of 2017, Venmo processed a record $6.8 billion in the first quarter, double the amount from the same period last year.
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Within iMessage, iPhone users can now add a payment directly from a conversation with a contact. They will be able to specify how much money they want to send, and from which account to send it. When someone sends a user money, that money will be deposited in his or her Apple Pay account to be used for a future purchase.
Apple Pay was launched in 2014 as a way to let shoppers load their credit card and debit card information onto their iPhones in the form of “mobile wallets.” Customers can then use either their iPhone (or linked Apple Watch) to pay at retail stores equipped with point-of-sale registers supporting near-field communication (NFC) technology, which enables frictionless payments between smartphones and registers. People place their smartphones or watches near the point-of-sale register sensors for a payment to be made without swiping a card. Consumers can also use Apple Pay accounts to pay for items within apps and on the web.
Federighi said on Monday that Apple Pay is the top contactless payment service on mobile devices nationwide, and by the end of year, Apple Pay will be available at 50% of retailers within the United States.