
Why Apple Wants to Get into the Unprofitable World of Payments Between Friends - jackgavigan
http://www.bloomberg.com/news/articles/2015-12-01/why-apple-wants-to-get-into-the-unprofitable-world-of-payments-between-friends
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eiopa
I feel that they have missed that train. There are ubiquitous products
(Venmo), and powerful competitors (Facebook Messenger Pay, or however they
call it). If they want Apple Pay to gain traction, they need to make it more
useful.

My personal wishlist item is being able to pay at a restaurant with my phone,
without ever asking the waiter for the tab.

Right now this requires multiple legs:

    
    
      1. Ask waiter for check (first trip)
      2. they go print it out and come back with it (second trip)
      3. I hand over my CC, and they take it to the register (third trip)
      4. They return with my credit card, and now I can finally leave the restaurant.
    

This is annoying for everyone. The waiter has to do multiple trips to just
handle the transaction without providing any meaningful value (as opposed to
recommendation entres, for example). For me it's annoying because I want to
leave, but I am essentially trapped until the whole dance completes.

A beefed up Apple Pay would be so cool for this scenario.

~~~
zappo2938
A lot of restaurants run a very thin profit margin, around 7%: 33% food cost,
33% labor cost, 30% overhead, and 7% profit. This doesn't account for the
ridiculousness that is open table and urban spoon. Often the owner has a
salary position which is included in the labor cost. One place where profit
can be increased is not throwing out food and portion control. The other way
to increase profit is being paid cash. Nobody uses cash anymore. A 2% to 3%
fee on all credit card transactions eats into that 7% profit, a lot. If Apple
can make it profitable to charge 1% transaction fee or a per transaction fee
like ATM transactions, they will do very well in the restaurant industry.
Moreover, if their app integrated into the POS system and is used widely, they
can step on opentable's toes offering discounts and reservations. I know one
chef who instead of opening a 40 seat or 120 seat restaurant, opened a 23 seat
restaurant and didn't accept credit cards, cash only. He always had a line out
the door and made a lot more money than his previous position as an executive
chef at a hotel in Beverly Hills. I would love to have a developer's license
to the NCR Aloha POS SDK.

~~~
msellout
LevelUp helps small businesses aggregate credit card transactions to decrease
the fees ([https://www.thelevelup.com/](https://www.thelevelup.com/)). I'm not
affiliated with them. It's a nice service that seems to be most prevalent in
Boston.

~~~
zappo2938
My friend developed an online ordering app for busy bars called SpeedeTab.[1]
Being able to order a drink and pay at the same time from a phone is very
nice. When the drink is ready the phone gets a push notification. The
bartender verifies the transaction number of the phone. Because they are doing
credit card transactions in bulk they got a very decent discount and they
passed that onto the bars and coffee shops like you mentioned with LevelUp.
For restaurants, getting the transaction fees at around 1% is a big deal
because that is a lot of the net profit. I haven't heard about LevelUp yet,
lot has changed in the past 10 years, and I'm out of the loop now.

[1] [http://www.speedetab.com/](http://www.speedetab.com/)

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xcavier
It could be you're missing the big picture.

Margin on a single transaction? >x%

Building out the already STUPENDOUS iTunes database of payment credentials?

Priceless.

Yes, low margin while you attack the beachhead. Once you secure that, and
apply the 'We're Apple' reality distortion in order to wrangle standards that
you control... Money magic happens.

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Animats
Interesting. PayPal started as peer to peer, and then stopped offering it in
favor of consumer-to-business payments.

There's an unserved market, but it's low end. Many people going to teller
windows in banks are depositing cash to someone else's account to pay rent.
This can be done even if the payer doesn't have an account at that branch. A
deposit of cash is an immediate credit and can't bounce, so landlords like
this. The depositor gets a receipt, so they can prove they paid. There's no
fee for a cash deposit, so it's free to both parties.

For people with money in the bank, there are many easy ways to pay rent, but
for people with little cash, this is the way to go. ATMs won't do such
transactions, require an account, and will suck up your cash if you're
overdrawn.

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jethro_tell
Now not only will my friends not iMessage me to come out, I won't be able to
split the tab.

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coldtea
Because it's extra convenience and another reason to get an iDevice?

~~~
veidr
Yeah, I think that alone is good enough reason for them to do it. The scale of
iOS is massive enough that this can be another one of those "things that make
people annoyed when their friends don't have an iPhone".

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tomcam
It is a lousy business for Apple, but they can probably a minimum fee of much
less than 25 cents.

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ubersync
An article on peer-2-peer payments, and not a single mention of Bitcoin or
other cryptocurrencies?

~~~
serge2k
Makes sense, they aren't relevant to most people.

~~~
grubles
Correct. P2P payments brought to you by profit-seeking, privacy-invading mega-
companies are not relevant to most people.

~~~
serge2k
No no, bitcoin.

Venmo, for example, is extremely useful.

