Why it matters to you
Apple is getting serious about expanding its digital wallet service into money transfers, and could announce the new service later this year. The feature would transform Apple Pay into a competitor to apps like PayPal’s Venmo and Square Cash, which allow users to send money to one and another through the use of an attached bank account or credit card, Recode reports.
The article cites sources familiar with the company’s plans, but offers conflicting reports; one source says a formal announcement can be expected later this year, while another says the launch is still up in the air. Either way, Apple was rumored to be considering such a service back in 2015, but nothing materialized after it convened with several large American banks.
If money transfers through Apple Pay are indeed back on again, it could prove to be a massive boon to the company’s platform. While Apple Pay was reported to be the leading digital payment system in the United States back in February, there’s still enormous room for growth as new retailers support the service and make it more ubiquitous.
To that end, another report claims Apple Pay may actually leave the iPhone in the form of a physical prepaid debit card, which could use those funds acquired through money transfers. Of course, those funds would be available on the device as well, but a physical card adds the benefit of a credit card number, which could be used for payments on websites. Recode says the card would run on Visa’s network, and the two companies were recently in talks about the partnership.
Financial institutions, however, are worried such a move would bolster Apple Pay at the expense of their own credit and debit cards, as the company could easily give priority to its payment method within the app while downplaying everything else. It’s rumored that these companies could be pressuring Visa against working with Apple — possibly delaying the related money-transfer service and contributing to Apple’s indecision over when and how to launch the effort.