Why Does Apple Want to Compete With Square and Venmo?

by Sarah Grotta 0

For some time, Apple has been rumored to be making an entrance into the person- to- person payment space. That rumor appears to be getting closer to reality as suggested by an article and podcast on Recode:

Do you send money to your friends from your phone? If not, would you do it if Apple facilitated the transaction?

Apple apparently believes that enough people would answer “yes” to the second question. Recode’s Jason Del Rey reported last week that the tech giant is in talks with payments industry partners to launch a payments product, which would compete with the likes of Square Cash and Venmo, which is owned by PayPal.

Apple’s entrance into the P2P space is not to introduce yet another P2P solution as its end game since P2P doesn’t generate income. The idea is that Apple would introduce P2P to allow for the movement of funds that could then be stored and used with Apple Pay at Apple Pay merchants where Apple can and does make money:

On the new podcast, Del Rey talked with Kara Swisher and Lauren Goode about what this under-wraps payments product might look like and how Apple could carve out a piece of the market. He said one of the main reasons Cupertino might be interested in such a product is because it would encourage people to add a credit or debit card to the iPhone’s existing virtual wallet, Apple Pay, for the first time

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The podcast has more details regarding what Apple may introduce in the P2P space. You can find that part of the conversation beginning around minute 8 and 30 seconds.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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