We send and receive money from our friends and family every now and then. Its cash, cheques, and bank transfers most of the times. And nowadays it is Venmo, Square cash and Google wallet transfers. What if we could start doing this, very securely, from our iPhone? This could be very exciting as Apple is.
Apple has filed a patent application, “Person-to-Person Payments Using Electronic Devices,” to the U.S. Patent and Trademark office. Apple has proposed using mobile devices to make payments between persons through various technologies like Wi-Fi, Bluetooth and near-field communication (NFC). It’s a different approach for person-to-person (P2P) payments compared to Google Wallet, Venmo, Square Cash and Facebook Payments, which allow its users to send payments to friends wherever they are through e-mail and messages.
Apple already has Apple Pay (customer-to-merchant) that lets us pay for cab fare, convenience store purchases and other products with the iPhone and Apple Watch. And in future it may also be used to pay our friends and family member. One of the main reason why Apple is jumping into P2P payment platform is that Apple Pay has not yet attracted more users since it’s launch.
Apple has discussed the project with several US banks including Wells Fargo, Chase, Capital One and JP Morgan. According to current plans, Apple would not charge banks for processing person-to-person payments. This differs from the Apple Pay we know today, where banks pay a small fee on every transaction. Partnering with banks would mean the Apple would not need to apply itself for money transmitter licences in the US states where it plans to operate.
One way Apple might add money transfer services to iOS is through iMessage, the proprietary messaging service. It’s already one of the most used default apps on iPhones and is especially popular.
Apple also proposes having a user launch a Passbook or wallet app, such as Apple Wallet to detect nearby devices they want to send payments to and plug in whatever amount they want to send. The payment would then be authenticated using a personal identification number or biometric device, such as the Touch ID sensor in the iPhone 5S, 6 and 6 Plus.
The patent filed by Apple targets few major points in P2P today. Background  of patent says:
- It can be difficult for individuals to directly conduct financial transactions with each other using their electronic devices. For example, credit-card transactions are typically processed by a payment network, and it can be complicated and time-consuming for individuals to interact with a payment network to conduct a financial transaction with each other.
- In addition, credit-card providers usually charge higher fees for financial transactions where there is no proof that a physical credit card was present. If two individuals attempt to directly conduct a financial transaction, they may face higher fees, which may discourage them from using their electronic devices to conduct the financial transaction.
While Apple is busy in implementing P2P payment platform technique, we are keeping an eye on it and waiting for major updates in this. Please feel free to contact us for any related queries or concerns.