A Critical Look at Apple Pay's new peer-to-peer (P2P) payment

Over the duration of the hugely popular Apple Worldwide Developers Conference (WWDC 2017), one of the high-points was the announcement of peer-to-peer payment feature coming to Apple Pay which is perhaps the fastest and safest way to send money from person to person.

Starting with iOS 11, Apple's upcoming mobile operating system will allow users to send money to each other using only a text message via iMessage.

Apple Pay was launched in 2014, and until now, it support only payment on websites, but with the recent addition of peer-to-peer payments, the payment platform is expanding into an area of payments dominated by PayPal in the US - with its Venmo app processing more than $1bn of payments a month.

The peer-to-peer payment system was necessitated by a scenario whereby you're about out getting drinks or dinner with friends. Then comes the bill, and someone can’t pay their share with the cash in their wallet. Now, What if your cash-strapped friend could send you their share with the phone in their pocket?

And with the link to bank account, debit card, or credit card; whenever you send a payment, it's charged on your account and held onto until your friend claims the transaction. Then, the money moves into your friend’s account. Easy, right?

While there’s been a recent explosion of apps that promise to make sending money easier and take the strain off having to carry cash; to make all this possible, you'd need to not only have the app, but link it with your bank account or debit card.

Albeit, P2P is seen as the gateway to the next generation of payment and personal finance services that could upend traditional consumer banking relationship.

Apple recently held discussions with Visa about creating its own pre-paid cards that would run on the Visa debit network and which would be tied to the new peer-to-peer service.

With the P2P service, users could then add the debit card, which may only come in a digital form, to their Apple Pay digital wallet to use for tap-and-pay purchases at brick-and-mortar stores.

Albeit, the potential of Apple getting its own debit card isn't positive for now, as most bank executives are concerned that Apple having its own card, could potentially be top of the wallet.

Apple Pay is charged at 0.15 percent on bank per transaction in the U.S., and a tiny fracture of debit card purchases.

Apple would likely not charge consumers to use the money-transfer service, which leaves only the use of the Apple debit card tied to it for revenue sources.
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