If you thought Apple couldn't build upon their already existing plethora of modernized features, applications and innovations, think again. Apple's latest software iOS 11 will entail a Venmo-like payments service that allows users to transfer money to each other through their devices as a subset of the 2014-launched Apple Pay.
Apple pay paved the path for a whole new world of digitized payment structures, including allowing users to pay for items in stores, online and via apps using store credit and debit cards. Authentication of such payments is completed solely through the click of an iPhone or iPad button.
This particular peer-to-peer payment system is something that is reflected not only in Pay-Pal owned Venmo, but also apps like Square, Google Wallet and Cookies. However, the difference is that Apple Pay can be accessed directly through iMessage in the form of an "Apple Pay Icon" at the bottom of every message as announced at Apple's annual WWDC developer conference.
The digital landscape has thus evolved because this gives users even easier access to make quick payments, being able to pay and request money at the touch of a button whilst already on the messenger app instead of opening another one.
Many of these applications such as Venmo have a social aspect to them that traditional cash transfer methods simply don't: users, many of whom are young millennials whose lives are dominated by social media, have grown accustomed to attaching a short caption or message with their payments that can publicly be viewed, liked and commented on in a continuous Facebook-like feed. This notion, coupled with the rapidity with which money transfers can be made, have threatened the position of conventional banks. Apps like Venmo allow users to put social pressure on people to return money on a daily basis without the ides of interest or any collateral a bank would have to impose. Moreover, they do not require any in person, physical setting up of an account or any complicated procedure that would appeal to the layman.
Thus, banks are trying to compete by launching peer-to-peer payment apps of their own. In February, 19 banks, including Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, teamed up to establish Zelle, a website and app lets users send and request money much as Venmo does. Bank of America says it is the first to incorporate all of Zelle's capabilities-including the ability to split bills between users-into its own mobile app. A standalone Zelle payment app is available to anyone with a debit card, regardless of where he or she banks, by the middle of the year.
All these companies are clearly tapping into a market that has a lot of room for expansion. As per Javelin Strategy and Research, the number of US mobile peer-to-peer users will increase from 69 million in 2015 to 126 million by 2020. By 2021, 1 in 2 consumers are expected be using peer-to-peer apps: these statistics cover only the US.
Interestingly, most current peer-to-peer payments services don't grow revenue for the companies that offer them. Their value lies in enticing people in to use other services from the same company: this is exactly the strategy Apple seems to be adopting. The question is, will others follow?