While still a rumor, an Apple service that let you send money to friends could be a nice compliment to Apple Pay.
'Just 13% of the estimated 680 million iPhone users have used Apple Pay, according to the research firm'.
ReCode reports today that "One source familiar with the plans told Recode they expect the company to announce the new service later this year".
The merchant angle is probably making Apple nervous, since it's failed to reach a critical mass with its Apple Pay service, more than two years after launch. As an extension of Apple Pay, Apple is reportedly looking to break into the peer-to-peer payment systems. The Wall Street Journal previously reported that Apple was looking to launch person-to-person Apple Pay mobile payments a year ago, although obviously nothing came of it.
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What's missing from AAPL's offering is support for transferring money from one person to another - a la PayPal Holdings Inc's (NASDAQ:PYPL) PayPal and Venmo, and Square Inc's (NYSE:SQ) Square Cash. The Wall Street Journal reported Apple had $36 billion Apple Pay transactions, much below the $207 billion the company expected. Venmo, for instance, has already processed billions of dollars and the volume is doubling year after year. This will basically allow iPhone owners to do peer to peer digital money transactions. This time, Apple's eventual service would combat for market supremacy with USA banks, PayPal, Venmo and other providers in the money transfer and processing industry.
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.
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Apple has a financial incentive for the card as well. With that, users will be allowed to take digital pre-paid cards that would run on Visa's debit system but be tied directly into Apple Pay.