Apple in Talks with US Banks to Develop Mobile Person-To-Person Payment Service | Hacker News Reader

Apple in Talks with US Banks to Develop Mobile Person-To-Person Payment Service

wsj.com

120 pointsjackgavigan196 comments

The US is so archaic in banking I'm not surprised that it takes Apple to do something about it, a shame. I'm still sending a paper check to the landlord every month, ha! What is this, the 70's?

The rest of the world already has direct, often immediate, free money transfers a few clicks away, and for a long time. We should focus there, rather than inserting more middle-men.

When I was in New Zealand, we even paid for cookies and such with it. Just paste in the account number, type in the amount, and hit the send key, done.

In China, it is also very convenient to send money by cellphone by scan some code. It's that easy.

I presume you're talking about WeChat or AliPay payment. The US has equivalents, but they're not as advanced.

The closest US equivalent to WeChat payment is Venmo. But I can use WeChat to pay in McDonald's, not just to send money to friends.

The closest US equivalent to Alipay is Paypal. But with Alipay I can not only pay for online purchases and pay utility bills, I can also see a list of utility bills I have yet to pay.

Alipay has a interesting and convenient feature named Acoustic Payment,which support Person-To-Person payment through mobile phone's Speaker

Wow. This is pretty cool. In the English version on Android, it's called 'Sound Pay'. When activated, it makes a repeated 'shoop shoop-shoop-shoop' sound, whilst it scans for other devices in the same mode.

This still astounds me.

I'm Australian but also hold a US account. The difference in ease between the two is insane. I cannot believe how difficult it is to simply wire money from a US bank account. In Australia, you can make a free transfer entirely from web/app and it will be received, often the next day.

It's no wonder why Paypal/Venmo are so huge in the US...

Not only that, in Australia to pay rent you can just set up BPay or an automated transfers. You can also wire your deposit to most landlords.

In the US they want cheques and money orders. It's insane.

"In Australia, you can make a free transfer entirely from web/app and it will be received, often the next day."

In the UK or China, it's minutes/hours, as long as you do the transfer before a certain time.

Sorry, should edit that - it's immediate for us in Australia if you have transferred to a certain person before OR if you use the same bank.

It's the next day for external banks / people that you haven't transferred to before.

And I believe the big four banks are working on increasing that to four clearances per day.

"It's the next day for external banks / people that you haven't transferred to before."

OK - so you're still a touch behind the UK and China ;)

Agreed. Still miles ahead of the US! ;)

In NZ it is immediate if same bank, 10pm that night if different. That few hours though can be nice if you change your mind.

On my New Zealand business account we can see transactions turn up every hour - that's how often they are cleared between the major banks. And my personal credit card balance on my mobile app changes seconds after I make a purchase.

FYI the Australian Payments Clearing Association is building a new payments platform to enable instant transfers and is expected to be operational by the second half of 2017:

http://www.apca.com.au/about-payments/future-of-payments/new...

Planet Money actually did a podcast about this. Banks are basically incentivized not to have it and keep ACH that way it is. A free and fast transfer service would destroy their wire revenue stream.

http://www.npr.org/sections/money/2013/10/04/229224964/episo...

Yup. BofA charges $35 or $45 for wire transfers. That's a hell of a lot of money when you have 200'000'000 captive customers.

For domestic transfers, under what circumstances do people use wire instead of ACH transfers? I've only used wire transfers for international purposes.

Only time I've had to wire money was for the downpayment on a house. Apparently there's a limit to how much you can send over ACH (at least with some banks).

The difference is reversibility.

ACH never settles, it just hasn't returned yet. There's a 60 day window for ordinary not authed returns, and even past that in cases of fraud. ACH is also push or pull, you can push money or the person you're paying can pull. (Or paychecks. A lot of paychecks are run over ACH). There are limits on ACH, depending on what you're doing its anywhere from 2.5k to 25k to $10^8.

Wires are nearly irreversible. Once you send the money, it's Gone. So the banks have a lot more documentation that they do for retail customers. Wires are push only.

Walmart person to person. It's $10 for amounts over $50. American Express Bluebird cards have a person to person, and there is PayPal. PayPal debit MasterCard makes the last one an attractive option.

It's funny. Every time I mention Walmart and how actual people who don't have all the advantages in life handle finacial transactions, I'm down voted. I think there are some blind spots in some of HN's users.

Hmm, I found the comment useful and just up voted it.

We already have similar tech here in the US, it just hasn't been adopted by everybody yet.

Where? I bank with Wells Fargo and to make a wire transfer to anyone in the US, I have to physically walk into a branch and it costs $20.

Bank of America and Chase both have it. You can send money to someone using their email address or mobile phone number.

Those systems are kludges. I'm talking about direct bank to bank account transfers at the push of a button, even for 25 cents.

You can also transfer with an routing+account number.

Chase has "QuickPay", where you just enter the recipient's info, and the transfer is near-instantaneous. Only works with other Chase customers, however. Other banks have similar systems.

My experience with Chase "quick" pay is that the money disappears for several days and occasionally never reaches the recipient.

Well that is alarming.

Amusingly enough, Wells Fargo has a similar service called SurePay. I have a friend that also banks with Wells Fargo that uses this to transfer funds to be, while it's 'fast' compared to the multi-day delay of ACH transfers it still takes one day before the funds are made available to me - from another customer at the same bank!

It amazes me that we already have four major payment networks in the US that work at the speed of the internet - Visa, MasterCard, Discover and Amex but banks continue to fight to keep ACH slow - probably because they don't make bank on interchange fees.

Banks use the float caused by check processing and transfer delays as investable funds. They have no real incentive to speed up the process, and most measures to reduce delays have come in the form of regulations.

That's fairly useless if it doesn't work with other banks.

A lot of people have Chase. I've used it a bunch of times.

Wells Fargo's online banking can send money to anyone with an email address, mobile number or Wells Fargo account number. And there's no charge to use it, though they have a message saying they might start charging in the future.

I'm a freelancer and I've had happily clients pay me through PayPal, Venmo, Dwolla and other services.

But if I were a landlord, I'd sadly ask for a check too. A lot of U.S. jurisdictions require a landlord not to accept rent in certain circumstances from a tenant he's trying to evict.

It's well established how to do this with a check: don't cash it, and possibly send it back to the sender certified mail. I wouldn't want to risk paying my lawyer to establish a precedent for what that looks like through a new payment system.

If only there was some way to not accept an electronic payment.

if this is the only time that having inbound money is a problem (is it?) then wouldn't amending the law be easier?

Is that really true? I hear claims of that sort but never actualities (I worked for a rent payment company).

Things should get better, to some extent, with Same Day ACH.

Starting September 2016, their should be relatively cheap next day ACH transactions available to the majority of US bank accounts.

It's far from perfect: still not instant, will probably cost money (interbank fee of about $0.09), and won't immediately support debits. However, it's a big step forward for US banks.

I haven't sent a paper check since about 1991 when I started using Bill Pay which AFAIK is part of nearly every bank in the USA now and has been for many many years. Not sure why you're sending checks manually. The bank decides if it's a transfer or a check. I don't care because to me it's been trivial for 24 years.

Compare to Japan where I had to transfer to my landlord at about $6 per transfer and doing online didn't happen until about 2003, 12 years after the USA.

Didn't say I did it manually, yes I use bill pay in this case and when I can. But, paying robots to print, mail, and deliver checks is still ridiculous when the internet exists. Not to mention the other end where the guy (I send them to a guy) deposits them.

In Denmark we have MobilePay and Swipp. The former works with your phone number and credit card, and the latter works with your phone number and bank account. When you want to send money, you send it to the receivers phone number and they can see it seconds later in the app, and on the account shortly after. It's really simple, though I probably would use it to pay for rent.

For payment between parties we have multiple systems. For one time payments we have FIK (a Danish way to request and pay between banks), for recurring payments we have "Betalings Service" which is basically an automated version of FIK, and lately automatic CC billing. I don't even think I can write checks anymore. I can request one from the bank for a fee, but I've done that exactly once in the last 15 years, when I bought my car.

In Sweden we have Swish (also linked to your phone number and bank account) and a bunch of other options.

In the UK, we have an industry-wide "Faster Payments"[1] system that allows for inter-bank transfers in less than an hour. The majority of banks also support Paym[2], which links a bank account to your mobile phone number, so people can send money to your mobile and it lands in your bank account.

Recently, the government decided that an Open Banking API Standard would be a good idea, so work has begun on figuring out how to deliver that.[3]

1: http://www.fasterpayments.org.uk

2: http://www.paym.co.uk

3: http://theodi.org/news/open-banking-working-group-uk-experts...

It's interesting how fast you can abandon cash when you have decent alternatives. Most NZ banks support paying people to their cell phone number too, with a URL to follow to get the money. It's not that clunky either which is surprising to me (given how long decent mobile apps have taken).

It's true, and I had in the past. Then I got wary about how everything in life is recorded in a database. So, have switched back to cash for non-recurring purchases.

Others have already pointed out that we already have the option Apple is developing in Denmark and Sweden.

But I also had to add that I haven't received a paper bill in several years. It used to be that bills were delivered in paper form in my mailbox every month but now I just get a notification from my bank app when I have bills and I can pay them from anywhere with my mobile phone.

I'll use Venmo until they pry it from my hands, it's one of the most life-transforming services I have ever used. I'll just repost my comment from the last Venmo thread here:

=========================================

Venmo was started by UPenn alums so it was popular among my friends long before it was a phenomenon (one of my good friends interned there and wrote the BlackBerry app). I used to use it exclusively by SMS starting around 2011. It used to be smart enough where I could text in "Pay John $5 for food" and it would figure out which John I meant and do it. I loved that. It's been amazing to watch Venmo grow to what it is now. If I could only keep three apps on my smartphone, I would choose Uber/Lyft, Venmo, and Google Maps. I can't navigate my life without all three of those. In my last year of college my Venmo year in review showed that I had spent $17k on Venmo and received $18k. So not a huge net, just a constant movement of money in and out among my friends (rent, food, parties, etc). If I had to use cash we would have never been able to make the small things work, and if I had to use PayPal I would have accrued $100s to $1000s in fees. So basically: thank you Venmo. You make my life measurably simpler.

I'm still stunned that people use Venmo. Letting paypal or any of their ilk -- and I'm one of the many people with a very negative paypal experience -- have access to your bank account sidesteps many or most of the consumer protections that credit cards give you. It's all fine until it isn't, and when it goes wrong, Venmo has possession of your money and can suck funds straight out of your checking account. Your cc doesn't and can't. If something goes wrong between you and your cc, they have to go to court to get their hands on your cash and you have a whole set of protections, ranging from general consumer laws to the courts themselves, the FDCPA, and the CFPB.

viz http://www.slate.com/articles/technology/safety_net/2015/02/...

Venmo still takes several days to transfer the money to your account, and you have to remember to request the funds—they don't even begin the transfer process until you do that.

It would literally be faster to write your friend a check.

We need instant cash transfers in the United States, like the rest of the world has.

My Venmo cashout transfers take <24h if I do them during business hours. Not instant, but not several days.

How does the rest of the world manage instant transfers? I thought the ACH method was still in use not because we're technologically slow (see: High Frequency Trading) but because it saves a huge amount of coordination to sum up net inter-bank transfers at the end of the day rather than constantly shuffling money around due to the fact that the net is often very small.

> How does the rest of the world manage instant transfers?

The same way the US stock markets can do 5 billion trades per month in realtime, with technology: technology that costs money, wipes out a major investment revenue stream, and necessitates cooperation between competitors. Does it surprise anyone that the EU pulled this off and the US is the farthest behind?

To be fair, the actual transfer of money between stock market participants is no faster than it is for personal bank accounts.

I made this Android app to provide instant check transfers off the phone screen:

www.getlightcheck.com

Unfortunately most banks don't support it with their image deposit apps, but in theory, it would be a practicable "check replacement" instead of Venmo. Maybe if enough people want to use it the banks would adjust their photo-deposit apps to accept checks from it.

I find venmo kludgey and irritating compared to square cash.

It's more of a pain to sign up for, you have to manually ask for your money, they publicly transmit your transaction history to the world and it's not obvious that they do so. They also send you 'anti-fraud' emails if you make joke comments about your terrorist sandwich.

It's like a paypal, but worse.

As someone who worked on payment processing in the US, there are a hundred absurd or obscure regulations. The most important involve making sure terrorists can't use your service to launder money; this usually boils down to adding some basic or clunky checks as there's really nothing else to do.

Paypal is free for personal use.

Square or even PayPal are generally better. Venmo prefers that the 2 parties know each other which is a significant limitation.

Yes! I was just thinking: One hundred person-to-person payment services aren't enough... we need 101!

Seriously though, Apple has a terrible time creating online services (http://www.zdnet.com/article/apple-and-the-cloud-a-magnifice...) and there is no way another entry in the "Proprietary, heavily policed, middle-man-encumbered social payment tool" is going to go anywhere.

There's plenty of mapping services and there was one predominant one, and yet Apple took a huge chunk of that market from Google just by having their maps preinstalled on their phones.

Apple pay works really nicely. I could see using this new person to person service instead of Venmo if it comes preinstalled, works nicely, has Apple's generally strong privacy controls and policies, and is super simple to use.

Seems like a smart move to me on Apple's part.

Yes, apple could probably capture 10% of this market and make some profit.

If that is your yardstick for "success", they can reach it.

But fracturing the market by yet another 10% is not my idea of the future of money.

There are a lot of encrypted messaging apps but only iMessage is actually usable, plus Apple already has your billing info.

Whatsapp would like to have a word with you. With iMessage you have to turn off SMS to make it really secure and once you do that you lose the ability to communicate with a large number of non-iOS users. OTOH Whatsapp is secure by default.

You don't have to shut off SMS, but it is only encrypted with another iOS device, although I am hopeful they will release an Android client as difficult as that would be.

You can disable SMS fallback which makes it so those you iMessage with won't receive an SMS if the message doesn't work while preserving SMS capabilities with non-iMessage users.

Whatsapp is secure by default

Source, please?

http://www.wired.com/2014/11/whatsapp-encrypted-messaging/

Is it on iOS yet? According to this post [1], it is only on two of the seven platforms that WhatsApp supports.

1. https://www.reddit.com/r/netsec/comments/34e6si/whatsapps_en...

Psssst

WhatsApp still doesn't have the new fancy encryption on iPhones, and you don't have to turn off SMS completely for iMessage; you just disable SMS fallback for users who are registered for iMessage

Are you kidding? The ubiquity of very secure hardware in iPhone 6 and later phones does not present a uniquely trusted advantage, over the many clumsy-to-use earlier startups?

Venmo is quite easy to use IMO and I didn't feel it is particularly insecure because it is backed by PayPal. That being said, a lot of my friends just use Chase QuickPay to transfer money, which works really well. TBH, I don't know how a potentially device/OS restricted service is going to play here. Maybe they need better PR to <i>educate</i> Android users to install their app.

Experience-wise, I have used both Venmo and QuickPay (and Apple Pay). I would much much rather use a P2P version of Apple Pay than either of the other two. Agreed that it would be yet-another service I'd have to use, but I already have to switch between Venmo and Chase Quickpay and others.

In addition, there are well-known cases of Venmo being insecure by design, because it relies on interbank transfers. The response from Venmo is that you should not use Venmo with people you don't trust, because the money can be clawed back. So, for example, for receiving payment for an item you sold on Craigslist. I highly doubt Apple would put its name/the TouchID brand on a service with similar pitfalls.

Paypal has a history of tying up their customers' funds for no good reason. They've done this to online fundraisers in the past, and even attempted to coerce a campaign benefitting the Red Cross into redirecting donations to the United Way in 2005. I refuse to do business with Paypal or Paypal-related companies whenever possible.

yep...and i agree : i avoid them.

One problem is the fact that you need to have an iPhone. Unless Apple makes it usable on Android. That would legitimately surprise me.

That article is a year old, and somewhat off. Apple's recent cloud stuff has all worked very well for me. The only spotty things are CoreData syncing (which may be deprecated, it's certainly not encouraged) and anything that touches iTunes (which is probably the oldest infrastructure they have).

Stuff they've launched since then such as iCloud Photos has been working great. Heck Apple Pay works extremely well and that's technically a 'cloud' service.

If CoreData syncing is discouraged, what is offered as its replacement?

CloudKit? https://developer.apple.com/icloud/

CloudKit doesn't do syncing, or conflict resolution like Core Data iCloud Syncing does.

So I guess you have to do those things yourself. Perhaps this is why CloudKit is more reliable -- because it doesn't do the tough parts that Core Data syncing attempted to do?

I don't agree, both iCloud Photos and Apple Music have been quite buggy for me.

iCloud Photos is still very slow. With Photostream, it used to be that photos were available almost instantly. Now I have to wait minutes, sometimes hours, for photos to sync from, say, my iPhone to my Mac. It's not a bandwidth issue on my end.

They are hit and miss. iCloud is somewhere between okay and meh (Photos made it worse), Music is terrible, but Apple Pay and iMessage are fantastic.

Apple has several things going for it if it wanted to created a person-to-person payment system:

* hundreds of millions of NFC-enabled, Touch ID-capable devices

* the platform vendor advantage: it would come pre-installed on new devices and in a future iOS update

* users already transact billions of dollars through Apple services: Apple Pay, iTunes and the App Store

* unlike many banks and retailers, Apple Pay hasn't been hacked

Not only could Apple create a Venmo or PayPal-like service using ACH, it would do something with in-person payments further down the line thanks to NFC and Touch ID.

Just as we've seen a large drop in the use of Google Maps on iOS once Apple Maps was good enough and came pre-installed, the same would happen with Venmo, PayPal, Square Cash and the rest, especially for those folks who've never used any of those services and are getting their first smartphone or dipping their toe into app-mediated payments for the first time.

Some people have speculated about Apple doing some kind of cryptocurrency (Dell and Microsoft accept bitcoin, for example), what they really need is real-time, multi-currency transactions, with the ability to create their own currency or token if they wanted to and that's Ripple: https://ripple.com/blog/a-new-chapter-for-ripple/. Ripple would enable Apple to do its favorite thing: cut out the middle man. And of course, Ripple would allow users to transact in whatever cryptocurrency they wanted to in addition to fiat currencies.

I can think of 3 or 4. But 100?

Apple's major advantage over Venmo and others is that they don't need to make money off the payment service. They can give this away for free, because they really care about the device margin. And using geo+TouchID would make for a very secure service, minimizing fraud problems that competitors would have to deal with.

Apple's in a unique position to make this happen. And yes, it could be bad news for Square.

Full text link: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

In Denmark we have two competing solutions. One is MobilePay, where you register your credit card and then you can make payments to contacts in your phone book which are also registered. It doesn't matter which bank you have. No fees, however there is a 2500 DKK limit of how much you can use and receive each day. The other one is Swipp, which is a collaboration between all the small banks, which is integrated in their mobile banking apps, which kind of works as MobilePay, it is just tied directly to your account. The MobilePay one is the most popular and stores have begun to accept that as payment as well, making it possible to use NFC or a QR code which you scan in the store when you check out. Some smaller stores just have a phone number you transfer money to. Works pretty well and has been for the past ~2 years.

With all the available options why would you want to use a service that requires you to figure out if the other person uses an iPhone?

Who said it would be iPhone-only?

Everything Apple has ever done historically (with mobile) has been iOS-only, what possible reason would there be to suspect this would be any different?

And given the number of Android devices in the wild far, far surpasses the number of iOS devices... using this service seems like more of a hassle than not.

In NYC, iPhone users seem pretty heavily concentrated in Manhattan. This means certain groups of people are probably hanging out in nearly entirely iPhone user enclaves. [0]

[0] - http://www.businessinsider.com/android-is-for-poor-people-ma...

That article was very misleading[1] and I wonder why[2] people keep citing it…

[1] here's a deconstruction of the data in the article: http://forums.appleinsider.com/t/158143/twitter-heat-map-sho...

[2] here's one explanation why: http://readwrite.com/2013/01/29/why-do-americans-hate-androi...

Hadn't seen that, thanks for the correction. Makes a lot of sense.

And given the number of Android devices in the wild far, far surpasses the number of iOS devices

That's obviously true globally, but not for some of their more important markets. iOS and Android are roughly equivalent in the US for example, with the latter having maybe 10% more of the market – I think?

While there's no doubt that instant money transfers are particularly useful in less developed markets, it's not like it wouldn't still be a useful service in the US.

One of the key differences here (for me at least) between an apple only app (assuming that is the case) and something like square cash is that if the person I want to send money to doesn't have an iPhone, I wouldn't be able to send them money, whereas if they don't have square cash I can tell them to download it and then send them money and with the current promotion, even get $5 for referring them.

Absolutely true - but i imagine the conversation is:

"I want to send you money. Do you have an iPhone?" "Yes" "Okay, here's the money."

versus

"Do you have an iPhone?" "No" "Okay, download SquareVenmoPal and I'll send it to you".

There's a built-in audience for Apple Pay that might prove to be beneficial.

Fair, my thought process always seems to conclude that having multiple apps is a downside, but that argument really doesn't hold up well once I consciously think about that fact.

Perhaps Apple Music (launched on Android today) is a sign of changing times?

I doubt it. I think Apple Music is a trojan horse (much like the original iPod) to get people using their music service.

They MAY release the payment stuff for Android (so users can receive payments) but I doubt they want to be a general payment provider for Android users.

What about android users that already have iTunes accounts via the Apple Music trojan horse ?

Not mobile but iTunes made it to Windows and now Apple Music is available on Android. It wouldn't be a first.

Apple Music just launched on Android.

Don't Apple Pay and Android Pay operate almost identically now? The original Google Wallet/Pay implementation which I used years ago via NFC was different. I don't believe the Android Pay name change is just branding.

I think Android Pay is like Apple Pay and Google Wallet is still available as a 'virtual' credit card that can be used with Android Pay.

Well, do bear in mind that the iPhone is pretty popular – so you've probably got a decent chance of wanting to transfer money to someone with a compatible device – maybe 25% or so?

Knowing Apple's UX, it'll be rather easy-to-use if it's available – so I'm not sure that the overhead of 'figuring out if the other person uses an iPhone' would be any higher than figuring out if they use Venmo or PayPal or Square or whatever the other options are.

> Knowing Apple's UX, it'll be rather easy-to-use

How can we assume this?

This exact thing has been tried many, many times - and sometimes to great success. What inherently makes you believe Apple's spin will be so much better than the other services and their unique problems?

The challenge Apple will face has nothing to do with UX - it will have to do with userbase.

It's likely (although not absolute) that using this service will require an iOS device. Given Android devices far outnumber iOS devices, this may pose a problem. Other services like PayPal and Square are universal services (device agnostic), and accounts are free (compared to Apple's barrier to entry which will likely cost you an iOS device).

How can we assume this?

Obviously we can't know for sure – but it does seem like a pretty safe assumption. Apple Pay is a good experience at the moment; it's easy to see how that experience could be extended to inter-device transfers (bring them close together, enter the amount to transfer, Touch ID and done – or something similar).

The challenge Apple will face has nothing to do with UX - it will have to do with user base.

The service will likely be available instantly to literally tens of millions of people with no additional effort on their part, as soon as Apple roll out a software update. That's a big benefit for Apple.

It's likely (although not absolute) that using this service will require an iOS device. Given Android devices far outnumber iOS devices, this may pose a problem.

I think I responded to this elsewhere, but that's only true globally. Bear in mind that even Apple Pay is only available in the US and the UK at the moment; iOS share in those countries is around 40%.

Other services like PayPal and Square are universal services (device agnostic), and accounts are free (compared to Apple's barrier to entry which will likely cost you an iOS device).

They do have the additional barrier of not being available to all users by default, though.

>This exact thing has been tried many, many times - and sometimes to great success. What inherently makes you believe Apple's spin will be so much better than the other services and their unique problems?

Well, they managed just that for payments with Apple Pay -- and with the iPod, iPhone, iPad etc for their respective markets, so...

Given Android devices far outnumber iOS devices, this may pose a problem. Other services like PayPal and Square are universal services (device agnostic), and accounts are free (compared to Apple's barrier to entry which will likely cost you an iOS device).

In the US, where this payment service would likely be available first, the iPhone has a marketshare of around 44% and growing. So the difference in marketshare is in the single digits: http://www.macrumors.com/2015/09/03/iphone-us-market-share-c...

Apple sold 74.5 million iPhones this quarter a year ago; they could sell even more this year, given the start the iPhone 6s had this year (13 million) vs. last year (10 million) during the first weekend of availability. If this keeps up, iPhone marketshare could surpass Android in a couple of years or less.

Second, just like with iMessage, Apple could differentiate between iOS users (blue bubbles) and non-iOS users with their green bubbles. Yes, this is a real thing: "It’s Kind of Cheesy Being Green" https://medium.com/message/its-kind-of-cheesy-being-green-2c...

The easiest thing for users would be to include payment in iMessage, similar to what Facebook and others are doing with their messaging apps.

Blue bubbles only. ;-)

My whole family and many of my friends use iPhones.

iPhones are extremely secure thanks to TouchID and Apple's software.

Apple already has payment info for me and a good relationship with banks.

They're normally pretty great at UI and can integrate it into the OS in ways no 3rd party ever could.

It will be built into the phone and come preinstalled so I don't have to convince people to install it.

Apple shows a lot more respect for my privacy than other companies that I could see doing this (such as Facebook/Google) and isn't a company I already despise (PayPal, YMMV when it comes to despising Apple).

Let's look at this a different way: no one has cracked this potential market yet (at least in the US, just nibbling at the edges)... what makes you think Apple can't make a good play?

No disrespect but you didn't answer OP's question. Instead you went on with a bit of an advertisement about how great Apple is. Venmo has cracked this potential market (per the article they have great market share)

I think Apple could build a tremendous P2P service based on your comments. But it's never going to be the platform lock in they desire because if we really do have meaningful broad adoption of P2P only cross platform offerings will work.

I saw his question as 'why would I want an iPhone only service', so that's what I answered.

Venmo may have great market share among people using apps to pay friends. I'm suggesting the total pool of people is MUCH bigger and Apple could take a good chunk of those people, not unlike when the smartphone, tablet, MP3 player, or digital music store markets got MUCH bigger. Will they take it all? No. Probably not even 'most'. But there is still a large opportunity there.

I've never used Venmo, but I wonder if they'll survive or end up a player that was there too soon or at the start but is overtaken by the 2nd wave.

There are plenty of companies/brands that fit that model. Diamond Rio, Palm, ICQ, Blackberry...

Or maybe the banks will come in and crush this market somehow. I know many are trying (BoA, Chase, USAA), but they may not get the UX to work well or be willing to cooperate between banks.

Of course it could; for a growing number of people, the combination of Apple Pay, Touch ID and the iOS eco-system is already creating lock-in. If Apple were to create a P2P payment service that was secure and dead simple to use--kinda like Apple Pay--it would become the leading way to pay on the iPhone in a week or two.

Looking at the latest 10K, Apple sold over 400 million iPhones the past 2 fiscal years. Yes, that's a relatively small percentage of the global cell phone market, but that puts them at around 44% (and growing) in the US, so they could easily create an iPhone-only payment service if they wanted to. Even something that leveraged the fact that all Apple Pay users have at least one debit card in their Wallet app that could be used to send and receive payments.

Apple of course has the huge advantage of being the platform vendor and being able to make their payment app available to hundreds of millions of potential users literally overnight with a software update. None of these other guys--Venmo, PayPal, Square Cash--can do anything like that. And among these companies, Apple is likely to be way more trusted, especially among the 40 and 50 year-olds who not only have never heard of Venmo but wouldn't trust it with their payment information. Apple doesn't have that problem.

Edit: I wrote about other Apple advantages in an earlier post: https://news.ycombinator.com/item?id=10550853

iMessage doesn't require you to figure out if the other user has an iPhone. Do an OS update and all of a sudden messages just start turning blue for some people (along with other UX bonuses that are superior to the vanilla SMS experience)

I would imagine that a consumer-to-consumer Apple Pay would work similarly. Hell, it might be integrated directly in the messages app.

The problem is texting was around way before the iPhone. So it wasn't an opportunity for Apple to create greater stickiness for iOS vs other operating systems. Apple could create a P2P offering that worked easily with non iOS phones. But that would appear to defeat the stated purpose of building such a service. Or at least significantly reduce it.

I want to give my children their allowance? Or transfer money back and forth with my partner?

You can do this easily with Square Cash and Venmo already.

As someone who has used both extensively, they both could use improvement.

Venmo is a holding service, requiring an extra step to actually get your money.

Square Cash, while easy and directly person-to-person, is slow.

Fix either of these issues and I'll convert.

Yes, but you asked about scenarios where I am pretty sure the other party has an iDevice. I am not in any way saying that Apple's solution would be superior to existing solutions.

Speaking as a Canadian, I can already use email to transfer money to almost any other Canadian, because our cartel of banks use a common system.

The question is why it hasn't happened sooner. This thing in your pocket is not just your telephone, but also your watch, map, calendar, contact book, music player, library, and so on. It can't be long before it's also your passport and your wallet.

These are things that had a life as separate items in days of yore and separate websites not long ago. They're also things that naturally lend themselves to the format of a phone.

You'd have thought the mobile wallet would have been the first thing on the minds of the big platform companies.

> The question is why it hasn't happened sooner.

I guess the hard part is that agreements need to be made to reach standards. And since everybody would like to be the "gatekeeper" of a payment service, this is particularly difficult.

By the way, I'm also still waiting for a password manager in my watch that seamlessly integrates with my desktop/laptop computer.

Because it already exists? Take a look at google wallet. Facebook has a money thing as well.

It has already happened. College students don't pay each other back in cash. They do so in Venmo

Yep, Venmo is the go-to on my campus. I actually prefer Square Cash as a product but Venmo has the adoption necessary.

Kenya has been doing this for close to a decade: http://www.economist.com/blogs/economist-explains/2013/05/ec...

Which is the key point. In Africa mobile payments have done more to boost the economy than almost anything else.

Arguably PayPal has done the same thing, but so many people have bad experiences with PayPal there would be a lot of love for a good alternative.

And of course it would lead to more Apple device lock-in. Tim Cook isn't going to hate that idea.

Maybe we should just sell the entire economy and everything in it to Apple and be done with it?

This will be apple pay via ACH basically. It will allow merchants to avoid the 1% charge on debit cards etc..

But it's describing a person-to-person service, not merchants.

That's how it starts. Which, presumably is the same vector for Square Cash.

It is? Given that Square already does merchant payments it would be a pretty odd direction.

Square Cash for Business followed regular (consumer) Square Cash. Square Cash for Business lets Square save money by charging debit cards instead of credit cards and spinning it as more convenient for everybody (it is very convenient once set up).

Last bit of the title is "...Payment Service Like Venmo"

Seems to be the latest push by Apple to integrate Apple Pay into some sort of payments ecosystem by force.

Should be interesting to see if there is any compelling reason to use Apple's solution over Venmo which has a huge incumbency advantage at this point.

> huge incumbency

I've never heard of Venmo, nor have any of my tech friends.

You probably don't live in the bay area.

Which means they don't have a huge incumbency.

I'm at school in upstate NY. Venmo dominates here as well. It's doing pretty well, but honestly is an unimpressive product.

Interested to hear why you think it's unimpressive. It just works, and it adds a fun, social element to payments without being creepy or annoying about it.

The key to the product is the strength of the network. They got all the major banks and CC providers to sign onto the platform, which was unprecedented. So from that standpoint, it's a fantastic product.

I don't think it's bad at all. You're right that it does exactly what it says it does and that's cool, but that doesn't make it impressive.

It's not particularly well designed, I don't know why there's a social dimension to it, etc. I don't think every product needs to be impressive and I don't mean it as a dig on Venmo. Just that if there IS a way to fill this niche in an "impressive" way, Venmo isn't it.

Edit: Actually Square Cash is pretty damn impressive. Emailing cash instantly with no need for accounts? That's baller.

It's not just bay area. I'm in Boston, and around here everyone under 30 seems to know of (and mostly use) Venmo, and many technically inclined older folk.

I live in the Bay Area and this is the second time I've heard of it. Nobody I know uses it. Square, occasionally.

> Should be interesting to see if there is any compelling reason to use Apple's solution over Venmo which has a huge incumbency advantage at this point.

insert chuckle here

Perhaps because Apple has incredible resources compared to Venmo, no one over 30 uses Venmo, and because Apple can easily integrate with the ACH system to enable these transfers.

If Apple were so inclined, they go so far as to have a banking subsidiary that was a stakeholder in the ACH system, thereby allowing them to shape the protocol currently being worked on to allow real time ACH transfers.

Paypal owns Venmo, so they have a fair amount of weight to throw around, especially in the payments/ACH space.

Doesn't Apple generate more profit per quarter than Paypal does all year?

Sure, but you might have made the same argument with Facebook when it launched "Poke" (2012) and "Slingshot" (2014) in order to compete with newcomer Snapchat, and we see how that turned out due to poor execution and the incumbency factor.

http://techcrunch.com/2012/12/21/facebook-poke-vs-snapchat-w...

https://gigaom.com/2014/09/04/facebooks-slingshot-experiment...

Seems to be the latest push by Apple to integrate Apple Pay into some sort of payments ecosystem by force.

I'm not sure why you'd consider this to be 'by force' – surely having a large market share, and offering a decent experience, are enough reasons for an ecosystem to develop because users want it?

surely having a large market share

Having a large market share of what, the smartphone market? It's the users of the peer-to-peer payment service/application that they need, and they have 0 of those right now.

Venmo already has millions of those users (many of whom who use iPhones) due to a good UX/UI and seamless integration with all major banks/card providers. So what value does apple bring to the table if my network is already set up on Venmo?

Having a large market share of what, the smartphone market? It's the users of the peer-to-peer payment service/application that they need, and they have 0 of those right now.

I think having a large smartphone platform to which you can roll out new features is really useful! There are what – maybe 4-5 million active Apple Pay users? That's a decent chunk of in-built market for the service, assuming it's seamlessly available to them all.

Obviously P2P Apple Pay doesn't offer you much benefit if you've already got a working solution to the problem.

It is definitely a benefit, but it's a far cry from guaranteed success. I have a trash folder full of 10 or so Apple pre-installed apps and I'm sure many others do as well. Apple P2P Pay will most likely be another one of those for me, which is why I see it as a catch-up play and one they will have to force on the market.

> Venmo which has a huge incumbency advantage at this point

Venmo vs. Apple. I'll take my chances with Apple.

Yes I realize Venmo is controlled by Paypal.

There is no friction to use it, Apple already has the credit card info. Paypal should be scared.

If Apple Pay had UX to pick someone near you also in Apple Pay to transfer funds too.....oh my!

I assume that is exactly what they have in mind.

Can't wait!

I love Apple and all but they'd have to somehow make it easier then Venmo, because it would be pretty hard to convince my non-tech friends AGAIN to move away from something that works so well

Easier than having it automatically installed on your phone, already aware of your contacts and payment details, and able to recognize nearby iphones and offer them as Payee's?

This service will push adoption of apple pay as well as benefit as people start to use it; I predict it'll take off here in exactly the same way that Paypass and similar took off in Australia when they were introduced. Lots of skepticism tied to a huge acceleration in uptake.

Good point; +1 for not bashing my opinion.

I will say that Venmo already is installed, is aware of my contacts, who I pay the most, and my payment details. But I use Apple Pay and I agree that it would be heavily adopted just because it's already there and it's one less "account" people have to worry about.

Independently of the "cool factor", there is one more consideration to take into account. With the multiplication of electronic payment systems we are at risk of physical cash becoming marginalised. From a practical point of view I am not sure I would miss it, but from a privacy point of view this would certainly becoming a loss. Every single payment would end up being tracked. Another surveillance state dream coming to reality.

If it's "person to person", then why do the banks need to be involved? If they are involved, then it's more like "bank to bank", isn't it?

> It also represents the latest attempt by banks and other providers to shift Americans away from cash and checks.

The good news is that the police can't steal the cash on you anymore. The bad news is now all of your purchases will be tracked all the time.

Because access to the source and target accounts still needs to be coordinated, and the appropriate withdrawal/deposit handled. Although it is interesting to consider, we are not yet at the point where our devices hold "actual" money.

Arguably Bitcoin is there.

Arguably, but it isn't a very good argument in 2015.

Apple got big money and only one successful product. They relentlessly want to own another successful product or service but I hope they won't.

You have to be kidding me. You don't get to be the biggest company on the planet with one successful product.

They may not be the biggest in everything they're successful at, but they don't need to be #1, as long as they're the #1 premium.

This is the solution to this problem as it exists in Sweden:

https://play.google.com/store/apps/details?id=se.bankgirot.s...

"Service would be rival to PayPal’s Venmo platform"

It's interesting that this is the subtitle. That is not the first service I would have compared the idea to.

Sincerely curious - which is? This sounded like a direct competitor to Venmo to me.

Square Cash? Facebook's... money thing? (What's it called?) Even PayPal itself!

I know this is anecdotal, but everyone I know uses Venmo. I have never met anyone who uses Square Cash or Messenger, and I have both apps. To be fair, I don't know anyone in the US that uses WhatsApp, but all my friends in Europe use it. So, maybe it's a regional thing? I would love to see real usage statistics on those.

I think it depends on the circles you run in. I think clusters of friends and family members probably use different services. My extended extended group of 100+ people all use Venmo (can tell by activity in Venmo feed).

That being said, I ran into someone recently who uses Square Cash with all her friends, but that's the first person I've hear using Square Cash (I downloaded it when it came out but no one else was using it.)

A very interesting real-world example of the network effect among second tier services. Second tier as is not FB, Pinterest, LinkedIn.

It's definitely anecdotal, and as a sibling poster said, it depends on your circles. Mine anecdotally happens to be all square cash and no venmo given the ease of setup for square cash.

Google Wallet?

Ah, makes sense. Is Google Wallet widely used, especially for person-to-person transactions? I've only ever used Venmo for that.

I use it with my roommates for rent - I think the sending limits are higher than Venmo. Otherwise it seems to work much the same way.

Apple already had Apple Pay. What's better about the new one?

Apple Pay is consumer -> business, so you can buy groceries at Whole Foods.

This is consumer -> consumer. Letting me send my friend $5 to split the tab on the pizza he's ordering or a quick $20 birthday gift to a niece.

PayPal originally offered that, then dropped it. Is there a major business there?

And both persons should use iPhones? Nope.

I was thinking about this. Square, you are F*d!

Why do you need banks, when you can just transfer Bitcoin?

The payments will need the appearance of being inexpensive/free, so Apple needs to first use network effects to capture a chunk of the market, then they will strong-arm Banks into paying fees to Apple (They need to earn their 3% or whatever on every payment somehow) which the banks will then indirectly forward to customers.

If Apple introduces this, it will likely require scalability higher than that of the current blockchain, which allows for roughly seven transactions per second. Peer-to-peer is definitely the way forward, but for now, banks have the infrastructure, and the customers.

There are cryptocurrencies now with more scalable architectures... I'm just counting my blessings that Apple is foolish enough to build another centralized system that is sure to be hobbled by AML requirements and misguided fraud-prevention measures.

Having a centrally-mediated, proprietary cryptocurrency endorsed by Apple/Google/Amazon/Facebook is the worst thing that could happen to the cryptocurrency community right now, so I'm glad none of these companies are pursuing this opportunity yet.

This will be fixed when it's needed. To deviate from the discussion, I don't know why Bitcoin doesn't move to a faster block time. Less time to confirm a transaction, more blocks per minute, more transactions per second.

It is very, very unlikely any major architectural tweak will happen with Bitcoin ever again. The only thing that will ever happen is maybe a few additional opcodes (to enable lightning networks perhaps) but even that will take many years.

(This isn't necessarily a bad thing... although I'm certainly not a fan of this approach)

There have already been four different proposals made to fix this (BIP 100, 101, 102, 103) and the miners shot them down.

Remember that the miners profit from increased competition and tx fees on small block sizes, and they control the block size.

It's more probable that banks will use some other system than ACH before bitcoin block size is ever increased.

Payment channels combined with the lightning network (https://www.youtube.com/watch?v=8zVzw912wPo) would allow Apple to create create off-chain transactions and aggregate micropayments into individual bitcoin transactions.

However, unless Apple has had a secret bitcoin project going on for the past few years, it's too early to deploy something like this. Their first person-to-person product certainly wouldn't use a cryptocurrency.

That's still not competitive to ACH or viable.

If 10 million people today used off-chain, their transactions wouldn't complete until 16 days later. If 10 million people then used off chain tomorrow, their transactions wouldn't go through until 32 days later.

t+22 days and you're already waiting a year to get paid in some instances.

That's not how it works; if you checkout the presentation, you'll see it's possible for the lightning network to enable transactions that don't ever need to be broadcast to the blockchain.

We're not there yet; this would require additional op codes to be added to get the full capabilities.

Side chain transactions aren't fulfilled until they're broadcast through the blockchain.

Most people and merchants do not want to be paid in arbitrary I.O.U.s that take weeks or sometimes months, which is essentially what side chain is.

Payment channels and the lightning network aren’t side chains. And there are no IOUs; not sure where that came from.

Good podcast about payment channels: https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-219

And on the lightning network: https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-242-...

Lightning Network info site: http://lightning.network

Bitcoin is not a very practical option for the general public because there are various scenarios where the user can permanently lose their money without the possibility of recovery. There are many techniques for keeping bitcoin secure, but even something as simple as sending money to the wrong address can cause a permanent loss of funds which is a serious problem in the context of social engineering attacks and technical issues related to preventing one's wallet from being stolen/lost/deleted/corrupted.

Another problem is that the plethora of online wallet services and mobile clients means that the user has to take responsibility for vetting the software or service they use to participate in the bitcoin economy. This ends up being very risky because developers are not legally responsible for loss of funds due to software errors, poor security or something more sinister.

On the other hand, the relatively strict and standardized operating procedures of the banks keeps customer money safe in practice and a trusted brand like Apple is held to a higher standard with regard to the trustworthiness of their software.

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