
Apple in Talks with US Banks to Develop Mobile Person-To-Person Payment Service - jackgavigan
http://www.wsj.com/articles/apple-in-talks-with-u-s-banks-to-develop-mobile-person-to-person-payment-service-1447274074
======
mixmastamyk
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.

~~~
seekingcharlie
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...

~~~
mixmastamyk
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.

~~~
lancewiggs
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.

------
habosa
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.

~~~
jaysonelliot
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.

~~~
habosa
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.

~~~
alexforster
> 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?

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

------
drcode
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...](http://www.zdnet.com/article/apple-and-the-cloud-a-magnificent-
missed-opportunity/)) and there is no way another entry in the "Proprietary,
heavily policed, middle-man-encumbered social payment tool" is going to go
anywhere.

~~~
MBCook
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.

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

~~~
cmyr
CloudKit?
[https://developer.apple.com/icloud/](https://developer.apple.com/icloud/)

~~~
drakenot
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?

------
not_that_noob
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.

------
keehun
Full text link:
[https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB4QqQIwAGoVChMI9Oi
--qOJyQIVhTYmCh25mg_s&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fapple-in-
talks-with-u-s-banks-to-develop-mobile-person-to-person-payment-
service-1447274074&usg=AFQjCNHkVGQrLWpRVRZaXVj3eh0AyciByg&sig2=YJcI7YoHzE30KbihlpCHRw&bvm=bv.107406026,d.eWE)

------
baronofcheese
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.

------
guelo
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?

~~~
MBCook
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?

~~~
jusben1369
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.

~~~
alwillis
_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._

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](https://news.ycombinator.com/item?id=10550853)

------
lordnacho
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.

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

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

------
sjg007
This will be apple pay via ACH basically. It will allow merchants to avoid the
1% charge on debit cards etc..

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

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

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

~~~
gkop
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).

------
roymurdock
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.

~~~
matthewmacleod
_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?

~~~
roymurdock
_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?

~~~
matthewmacleod
_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.

~~~
roymurdock
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.

------
bg0
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

~~~
bnj
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.

~~~
bg0
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.

------
cm2187
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.

------
mtgx
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.

~~~
revscat
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.

~~~
LeoPanthera
Arguably Bitcoin is there.

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

------
armaxt
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.

~~~
themartorana
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.

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

[https://play.google.com/store/apps/details?id=se.bankgirot.s...](https://play.google.com/store/apps/details?id=se.bankgirot.swish&hl=en)

------
LeoPanthera
"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.

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

~~~
klipt
Google Wallet?

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

~~~
klipt
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.

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

~~~
MBCook
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.

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

------
eva1984
And both persons should use iPhones? Nope.

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

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

~~~
unfunco
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.

~~~
kristianp
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.

~~~
drcode
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)

