Apple Inc. (AAPL) Pushing Apple Pay in a War on the Wallet

Apple Inc (AAPL) Apple Pay

Apple Inc. is not giving up on the war it declared on the wallet as it seeks to change how people handle payments in the digital age. Apple was again in the news about its interest in the mobile payments market. The New York Times reports that Apple is working on a person-to-person, peer-to-peer payment service. The new peer-to-peer payment service from Apple might help the struggling Apple Pay service to start firing on all cylinders.

Apple Inc (NASDAQ:AAPL) Apple Pay

Apple has been trying hard to make a difference in the mobile payments space. The firm started its Apple Pay service in October 2014 but the Apple Pay is yet to get the kind of strong traction that Apple gets on its products and services. Earlier this summer, the firm merged its payments with Passbook to create a revamped wallet that can be used for storing digital tickets and airline boarding passes.

Apple peer-to-peer payments service is almost here

The New York Times reports that sources deep within Apple have revealed that the firm is serious about creating a peer-to-peer payment system. The firm is already having talks with banks about how iPhone owners can easily send money to their contacts just as easily as sending a message. The peer-to-peer payment service that Apple intends to launch will compete with similar services such as Square Cash from Square and Venmo from PayPal.

In June, Apple declared war on the wallet when VP Apple Pay, Jennifer Bailey hinted that the firm wanted to replace the wallet. Apple has not been able to make a dent on killing the wallet as less than 17% of iPhone 6 and iPhone 6S users have embraced Apple Pay as of last month. Karen Webster, chief executive of Market Platform Dynamics thinks Apple might be able to succeed in the payments space with a peer-to-peer system. In her words, “A peer-to-peer payments product could help Apple’s Wallet gain traction.”

Payments is a crowded space

The payments space is crowded and Apple needs to find a way to get a strong foothold in that space. Alphabet’s Google has a struggling payment service in Google Wallet and Android Pay is largely unknown even among people that use phones running Android OS. Samsung’s Samsung Pay could have gained some traction because of its large global market share, but Samsung Pay is not accepted in most retail locations.

The banks (age-long custodians of money) seem to have the best shot at having a breakthrough in the mobile payment space. U.S. banks have created a peer-to-peer payment service within the banking network. The payment service called clear Xchange is billed to cover about 80% of U.S. banks. Chase Bank has also entered the mobile payment space with its Chase Pay service. Chase Pay is designed to handle concerns about cost of payment, speed & ease of checkout, and fraud liabilities.

Apple can continue to launch, relaunch, and rebrand its mobile payment service from now until eternity. Yet, the fact remains that the firm hasn’t cracked the secret code to getting ahead in the payments space. It remains to be seen though if the new peer-to-peer service will help Apple get its feet in the door.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.


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