Mobile payments have piqued Apple’s interest with the launch of Apple Pay. But the group wants more than a small piece of the pie. Like its dominating grip on handheld devices, it also wants a lion’s share of this thriving industry. “In-person mobile payments is currently the smallest category of mobile payments, but it holds the greatest growth potential. The fastest growth will occur in verticals where friction is embedded in the commerce experience and with high-velocity merchants,” wrote Denée Carrington from Forrester.
Shut Up and Take My Money
Apple is positioning itself to push the boundaries of mobile payments even further. Not content with store transactions, the leading tech brand is reportedly working on adding peer-to-peer (P2P) options for its customers. The service is very similar to Square Cash and Venmo. Even Facebook and Snapchat offer P2P payments directly from their respective messaging panels. The development isn’t anything new for the industry. However, if the company moves forward with the launch, its competitors will surely take a hit. For die-hard Apple fans, it wouldn’t make sense to have two smartphone apps that perform the same functions. When left to choose between Apple Pay or another option with less features, it’s obvious that the latter will get the boot from the panel.
The brand wants to get the P2P service up and running by 2016. Apple is currently engaging in closed-door talks with Capital One Financial Corp., U.S. Bancorp., Wells Fargo & Co. and J.P. Morgan Chase & Co. for the initial plan. In order for this to catch on, the group needs to play nice with existing financial institutions. Shunning them away would be a mistake (Apple is not a bank, and is considered a third-party service). People still need to connect their checking or savings accounts and debit or credit cards to the app to be able to use it properly. For now, the most used P2P service is still PayPal. Not far behind is online banking.
Get Your Digital Wallets Ready
The company has great plans to enforce its will on the nascent sector. “Your kids will not know what money is,” said Apple CEO Tim Cook during a speech at Trinity College in Dublin. It sounds scary, but it’s true. Cash is being phased out by digital options, and traditional banks are having a hard time competing with savvy payment apps.
Everyone loves Apple Pay. With banks and other financial institutions jumping in to partner with the service, customers now have a long list of choices to use during checkout. It’s super safe too. The app offers end-to-end encryption, so the chances of getting one’s identity intercepted during a transaction is greatly minimized.
There’s no doubt that the service contributed to the company’s record-breaking fourth quarter sales. “Fiscal 2015 was Apple’s most successful year ever, with revenue growing 28% to nearly $234 billion. This continued success is the result of our commitment to making the best, most innovative products on Earth, and it’s a testament to the tremendous execution by our teams,” said Cook.