On Thursday, sources close to Apple leaked the tech giant was considering to make a money-transfer app again as part of its growing ecosystem of services. Visa is also involved in creating cards linked to the digital wallets, according to the report.
The company first played with this idea two years ago, when it talked to some of the biggest U.S. banks including J.P Morgan Chase and Wells Fargo to develop and launch a similar platform. Back then, it was also touted as a potential rival to PayPal’s Venmo, which currently dominates the scene.
Apple currently offers some services through Apple Pay, but the idea of a peer-to-peer system that works not only with commercial establishments but also between users expands on that concept. Rumors say the tech giant could announce the app later this year.
How would Apple’s new payment system work?
Whereas Apple Pay works by associating an existing debit or credit card to your account, the upcoming platform could do away with that need by storing money independently and letting users move it around and pay as they please.
iPhone owners would have a separate account, possibly tied to their Apple ID, and a digital wallet to which they could wire money. Some sort of verification system would confirm transactions between users when they transferred money to each other.
Visa’s reported involvement, however, adds a new dimension to this approach. People could sign up for a prepaid digital card that would work exactly like a bank card, allowing them to affiliate it to their accounts.
In stores or compatible points of sale, the platform would allow people to just pay with their phone on the terminal like Apple Pay works now. Web sites and online services could accept the card as means of payment as well.
Apple might face some fierce competition from Venmo
If the rumors are true and Apple is indeed developing the P2P app, that still does not mean the company will launch it. Cupertino has been considering such a system for years now, but competition might be making it think twice before doing anything.
PayPal’s Venmo has quickly made itself a household name among millennials, who are responsible for the skyrocketing growth the company has seen each quarter since 2015. The app registered a transaction volume reaching $6.8 billion last quarter alone.
Other startups and digital pay alternatives by banks also have a cemented position in the market, so it might be taking Apple some time to think of a strategy to set itself apart from the bunch with a new offering for iPhone users.
Recode reports that financial institutions have shown some reluctance to Visa’s rumored affiliation with the project. They will express their concerns directly with the card maker next week at a private summit, according to inside sources.