Apple Pay Cash – Gets an A+

Apple announced Apple Pay Cash yesterday at their WWDC (see recode article). Summary.. Apple gets an A+! I love the simplicity and the intuitive nature of how this works in a messaging metaphor that customers are familiar with (ie not introducing another app).

Highlights

  • Leverages imessage
  • Integrates to Applepay
  • GDOT Pre-paid Visa card in back end
  • Funds go into Apple Cash account and can be used at POS (Similar to Google Proxy card)
  • US Only, Available in Fall
  • Works Apple-Apple devices (iOS/Mac OS)

Winners

  • Apple
  • Consumers
  • Visa
  • GDOT

The payments battlefield is strewn with the corpses of P2P players, it is the worst area of payments to build capability. Why? Payment is not only financial it is social. There are VERY FEW payment problems left to be solved. There is no P2P solution faster than cash… so anything that gains traction here must have a social aspect (ie Venmo).

Apple leads innovation through customer experience. They understand customers don’t “WANT” a bank.. they want to go to a movie.. or buy from Amazon.. consumers only work with banks because they “have to” (See Customer Behavior: Discerning and Capturing Value).  Apple has become the primary consumer Channel to all content and all services.

What I like best about Apple’s new service is that it integrates into what the consumer already does (message) AND existing applications (wallet). It also solves a key problem for unbanked iPhone owners (teenagers). Apple has made payments part of the operating system (see Payment in the OS ) in a model that very closely resembles what Osama Bedier’s team built at Google in 2012 (see Google Wallet).

Predictions..

Apple Pay Cash will be slow to take off for next 5 yrs (under $20M TPV 2018). The REAL Apple Pay future will be in app, and in browser.

 

6 thoughts on “Apple Pay Cash – Gets an A+”

  1. Will be interesting to see what price point they choose to load. The price elasticity of demand for P2P in US is infinite. At a nickel, volume will tank. Given that Apple, Square, Google, Zelle and PayPal all have competing solutions the interesting thing to watch will be how issuers and the networks treat these transactions…transfers, purchases, quasi cash?

    1. Why would purchases not be treated as pre-paid card transactions, whether done through Apple Pay at the POS, in-app or in-browser? I have a feeling they will have access to Visa Direct and Mastercard Send rails for cash-out, and maybe a potential Zelle integration somewhere down the road?

      1. at POS it must go the route that Frank and Osama already defined.. through the Visa GDOT proxy card.. For cash out.. linked debit card (like Square) is my guess for primary channel

    1. only in the comments.. the objective is this blog is communicating with my friends/community.. I’m not trying to be the source of all payments knowldege.. or a hub for content.. just my hub for freiends

  2. Apple’s approach of turning an everyday application into a payment platform ensures a seamless integration into consumer’s everyday life. It would really be interesting to see how Apple Pay Cash develops in the years to come. Movement into less affluent regions in the world would mean that Apple Pay Cash cannot be constricted to its iPhone.

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