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.
Planet Money actually did a podcast about this. Banks are basically incentivized not to have it and keep ACH that way it is. A free and fast transfer service would destroy their wire revenue stream.
For domestic transfers, under what circumstances do people use wire instead of ACH transfers? I've only used wire transfers for international purposes.
Walmart person to person. It's $10 for amounts over $50. American Express Bluebird cards have a person to person, and there is PayPal. PayPal debit MasterCard makes the last one an attractive option.
It's funny. Every time I mention Walmart and how actual people who don't have all the advantages in life handle finacial transactions, I'm down voted. I think there are some blind spots in some of HN's users.
Only time I've had to wire money was for the downpayment on a house. Apparently there's a limit to how much you can send over ACH (at least with some banks).
ACH never settles, it just hasn't returned yet. There's a 60 day window for ordinary not authed returns, and even past that in cases of fraud. ACH is also push or pull, you can push money or the person you're paying can pull. (Or paychecks. A lot of paychecks are run over ACH). There are limits on ACH, depending on what you're doing its anywhere from 2.5k to 25k to $10^8.
Wires are nearly irreversible. Once you send the money, it's Gone. So the banks have a lot more documentation that they do for retail customers. Wires are push only.
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...
FYI the Australian Payments Clearing Association is building a new payments platform to enable instant transfers and is expected to be operational by the second half of 2017:
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.
In the UK, we have an industry-wide "Faster Payments"[1] system that allows for inter-bank transfers in less than an hour. The majority of banks also support Paym[2], which links a bank account to your mobile phone number, so people can send money to your mobile and it lands in your bank account.
Recently, the government decided that an Open Banking API Standard would be a good idea, so work has begun on figuring out how to deliver that.[3]
I'm a freelancer and I've had happily clients pay me through PayPal, Venmo, Dwolla and other services.
But if I were a landlord, I'd sadly ask for a check too. A lot of U.S. jurisdictions require a landlord not to accept rent in certain circumstances from a tenant he's trying to evict.
It's well established how to do this with a check: don't cash it, and possibly send it back to the sender certified mail. I wouldn't want to risk paying my lawyer to establish a precedent for what that looks like through a new payment system.
Things should get better, to some extent, with Same Day ACH.
Starting September 2016, their should be relatively cheap next day ACH transactions available to the majority of US bank accounts.
It's far from perfect: still not instant, will probably cost money (interbank fee of about $0.09), and won't immediately support debits. However, it's a big step forward for US banks.
In Denmark we have MobilePay and Swipp. The former works with your phone number and credit card, and the latter works with your phone number and bank account. When you want to send money, you send it to the receivers phone number and they can see it seconds later in the app, and on the account shortly after. It's really simple, though I probably would use it to pay for rent.
For payment between parties we have multiple systems. For one time payments we have FIK (a Danish way to request and pay between banks), for recurring payments we have "Betalings Service" which is basically an automated version of FIK, and lately automatic CC billing. I don't even think I can write checks anymore. I can request one from the bank for a fee, but I've done that exactly once in the last 15 years, when I bought my car.
It's interesting how fast you can abandon cash when you have decent alternatives. Most NZ banks support paying people to their cell phone number too, with a URL to follow to get the money. It's not that clunky either which is surprising to me (given how long decent mobile apps have taken).
It's true, and I had in the past. Then I got wary about how everything in life is recorded in a database. So, have switched back to cash for non-recurring purchases.
I presume you're talking about WeChat or AliPay payment. The US has equivalents, but they're not as advanced.
The closest US equivalent to WeChat payment is Venmo. But I can use WeChat to pay in McDonald's, not just to send money to friends.
The closest US equivalent to Alipay is Paypal. But with Alipay I can not only pay for online purchases and pay utility bills, I can also see a list of utility bills I have yet to pay.
Wow. This is pretty cool. In the English version on Android, it's called 'Sound Pay'. When activated, it makes a repeated 'shoop shoop-shoop-shoop' sound, whilst it scans for other devices in the same mode.
I haven't sent a paper check since about 1991 when I started using Bill Pay which AFAIK is part of nearly every bank in the USA now and has been for many many years. Not sure why you're sending checks manually. The bank decides if it's a transfer or a check. I don't care because to me it's been trivial for 24 years.
Compare to Japan where I had to transfer to my landlord at about $6 per transfer and doing online didn't happen until about 2003, 12 years after the USA.
Didn't say I did it manually, yes I use bill pay in this case and when I can. But, paying robots to print, mail, and deliver checks is still ridiculous when the internet exists. Not to mention the other end where the guy (I send them to a guy) deposits them.
Others have already pointed out that we already have the option Apple is developing in Denmark and Sweden.
But I also had to add that I haven't received a paper bill in several years. It used to be that bills were delivered in paper form in my mailbox every month but now I just get a notification from my bank app when I have bills and I can pay them from anywhere with my mobile phone.
Chase has "QuickPay", where you just enter the recipient's info, and the transfer is near-instantaneous. Only works with other Chase customers, however. Other banks have similar systems.
Amusingly enough, Wells Fargo has a similar service called SurePay. I have a friend that also banks with Wells Fargo that uses this to transfer funds to be, while it's 'fast' compared to the multi-day delay of ACH transfers it still takes one day before the funds are made available to me - from another customer at the same bank!
It amazes me that we already have four major payment networks in the US that work at the speed of the internet - Visa, MasterCard, Discover and Amex but banks continue to fight to keep ACH slow - probably because they don't make bank on interchange fees.
Banks use the float caused by check processing and transfer delays as investable funds. They have no real incentive to speed up the process, and most measures to reduce delays have come in the form of regulations.
Wells Fargo's online banking can send money to anyone with an email address, mobile number or Wells Fargo account number. And there's no charge to use it, though they have a message saying they might start charging in the future.
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.
I'm still stunned that people use Venmo. Letting paypal or any of their ilk -- and I'm one of the many people with a very negative paypal experience -- have access to your bank account sidesteps many or most of the consumer protections that credit cards give you. It's all fine until it isn't, and when it goes wrong, Venmo has possession of your money and can suck funds straight out of your checking account. Your cc doesn't and can't. If something goes wrong between you and your cc, they have to go to court to get their hands on your cash and you have a whole set of protections, ranging from general consumer laws to the courts themselves, the FDCPA, and the CFPB.
I find venmo kludgey and irritating compared to square cash.
It's more of a pain to sign up for, you have to manually ask for your money, they publicly transmit your transaction history to the world and it's not obvious that they do so. They also send you 'anti-fraud' emails if you make joke comments about your terrorist sandwich.
As someone who worked on payment processing in the US, there are a hundred absurd or obscure regulations. The most important involve making sure terrorists can't use your service to launder money; this usually boils down to adding some basic or clunky checks as there's really nothing else to do.
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.
I made this Android app to provide instant check transfers off the phone screen:
www.getlightcheck.com
Unfortunately most banks don't support it with their image deposit apps, but in theory, it would be a practicable "check replacement" instead of Venmo. Maybe if enough people want to use it the banks would adjust their photo-deposit apps to accept checks from it.
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.
> 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?
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...) and there is no way another entry in the "Proprietary, heavily policed, middle-man-encumbered social payment tool" is going to go anywhere.
Are you kidding? The ubiquity of very secure hardware in iPhone 6 and later phones does not present a uniquely trusted advantage, over the many clumsy-to-use earlier startups?
Venmo is quite easy to use IMO and I didn't feel it is particularly insecure because it is backed by PayPal. That being said, a lot of my friends just use Chase QuickPay to transfer money, which works really well. TBH, I don't know how a potentially device/OS restricted service is going to play here. Maybe they need better PR to <i>educate</i> Android users to install their app.
Experience-wise, I have used both Venmo and QuickPay (and Apple Pay). I would much much rather use a P2P version of Apple Pay than either of the other two. Agreed that it would be yet-another service I'd have to use, but I already have to switch between Venmo and Chase Quickpay and others.
In addition, there are well-known cases of Venmo being insecure by design, because it relies on interbank transfers. The response from Venmo is that you should not use Venmo with people you don't trust, because the money can be clawed back. So, for example, for receiving payment for an item you sold on Craigslist. I highly doubt Apple would put its name/the TouchID brand on a service with similar pitfalls.
Paypal has a history of tying up their customers' funds for no good reason. They've done this to online fundraisers in the past, and even attempted to coerce a campaign benefitting the Red Cross into redirecting donations to the United Way in 2005. I refuse to do business with Paypal or Paypal-related companies whenever possible.
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.
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?
iCloud Photos is still very slow. With Photostream, it used to be that photos were available almost instantly. Now I have to wait minutes, sometimes hours, for photos to sync from, say, my iPhone to my Mac. It's not a bandwidth issue on my end.
Apple has several things going for it if it wanted to created a person-to-person payment system:
* hundreds of millions of NFC-enabled, Touch ID-capable devices
* the platform vendor advantage: it would come pre-installed on new devices and in a future iOS update
* users already transact billions of dollars through Apple services: Apple Pay, iTunes and the App Store
* unlike many banks and retailers, Apple Pay hasn't been hacked
Not only could Apple create a Venmo or PayPal-like service using ACH, it would do something with in-person payments further down the line thanks to NFC and Touch ID.
Just as we've seen a large drop in the use of Google Maps on iOS once Apple Maps was good enough and came pre-installed, the same would happen with Venmo, PayPal, Square Cash and the rest, especially for those folks who've never used any of those services and are getting their first smartphone or dipping their toe into app-mediated payments for the first time.
Some people have speculated about Apple doing some kind of cryptocurrency (Dell and Microsoft accept bitcoin, for example), what they really need is real-time, multi-currency transactions, with the ability to create their own currency or token if they wanted to and that's Ripple: https://ripple.com/blog/a-new-chapter-for-ripple/. Ripple would enable Apple to do its favorite thing: cut out the middle man. And of course, Ripple would allow users to transact in whatever cryptocurrency they wanted to in addition to fiat currencies.
There's plenty of mapping services and there was one predominant one, and yet Apple took a huge chunk of that market from Google just by having their maps preinstalled on their phones.
Apple pay works really nicely. I could see using this new person to person service instead of Venmo if it comes preinstalled, works nicely, has Apple's generally strong privacy controls and policies, and is super simple to use.
Whatsapp would like to have a word with you. With iMessage you have to turn off SMS to make it really secure and once you do that you lose the ability to communicate with a large number of non-iOS users. OTOH Whatsapp is secure by default.
WhatsApp still doesn't have the new fancy encryption on iPhones, and you don't have to turn off SMS completely for iMessage; you just disable SMS fallback for users who are registered for iMessage
You can disable SMS fallback which makes it so those you iMessage with won't receive an SMS if the message doesn't work while preserving SMS capabilities with non-iMessage users.
You don't have to shut off SMS, but it is only encrypted with another iOS device, although I am hopeful they will release an Android client as difficult as that would be.
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.
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.
Well, do bear in mind that the iPhone is pretty popular – so you've probably got a decent chance of wanting to transfer money to someone with a compatible device – maybe 25% or so?
Knowing Apple's UX, it'll be rather easy-to-use if it's available – so I'm not sure that the overhead of 'figuring out if the other person uses an iPhone' would be any higher than figuring out if they use Venmo or PayPal or Square or whatever the other options are.
This exact thing has been tried many, many times - and sometimes to great success. What inherently makes you believe Apple's spin will be so much better than the other services and their unique problems?
The challenge Apple will face has nothing to do with UX - it will have to do with userbase.
It's likely (although not absolute) that using this service will require an iOS device. Given Android devices far outnumber iOS devices, this may pose a problem. Other services like PayPal and Square are universal services (device agnostic), and accounts are free (compared to Apple's barrier to entry which will likely cost you an iOS device).
Obviously we can't know for sure – but it does seem like a pretty safe assumption. Apple Pay is a good experience at the moment; it's easy to see how that experience could be extended to inter-device transfers (bring them close together, enter the amount to transfer, Touch ID and done – or something similar).
The challenge Apple will face has nothing to do with UX - it will have to do with user base.
The service will likely be available instantly to literally tens of millions of people with no additional effort on their part, as soon as Apple roll out a software update. That's a big benefit for Apple.
It's likely (although not absolute) that using this service will require an iOS device. Given Android devices far outnumber iOS devices, this may pose a problem.
I think I responded to this elsewhere, but that's only true globally. Bear in mind that even Apple Pay is only available in the US and the UK at the moment; iOS share in those countries is around 40%.
Other services like PayPal and Square are universal services (device agnostic), and accounts are free (compared to Apple's barrier to entry which will likely cost you an iOS device).
They do have the additional barrier of not being available to all users by default, though.
Given Android devices far outnumber iOS devices, this may pose a problem. Other services like PayPal and Square are universal services (device agnostic), and accounts are free (compared to Apple's barrier to entry which will likely cost you an iOS device).
Apple sold 74.5 million iPhones this quarter a year ago; they could sell even more this year, given the start the iPhone 6s had this year (13 million) vs. last year (10 million) during the first weekend of availability. If this keeps up, iPhone marketshare could surpass Android in a couple of years or less.
Second, just like with iMessage, Apple could differentiate between iOS users (blue bubbles) and non-iOS users with their green bubbles. Yes, this is a real thing: "It’s Kind of Cheesy Being Green" https://medium.com/message/its-kind-of-cheesy-being-green-2c...
The easiest thing for users would be to include payment in iMessage, similar to what Facebook and others are doing with their messaging apps.
>This exact thing has been tried many, many times - and sometimes to great success. What inherently makes you believe Apple's spin will be so much better than the other services and their unique problems?
Well, they managed just that for payments with Apple Pay -- and with the iPod, iPhone, iPad etc for their respective markets, so...
iMessage doesn't require you to figure out if the other user has an iPhone. Do an OS update and all of a sudden messages just start turning blue for some people (along with other UX bonuses that are superior to the vanilla SMS experience)
I would imagine that a consumer-to-consumer Apple Pay would work similarly. Hell, it might be integrated directly in the messages app.
The problem is texting was around way before the iPhone. So it wasn't an opportunity for Apple to create greater stickiness for iOS vs other operating systems. Apple could create a P2P offering that worked easily with non iOS phones. But that would appear to defeat the stated purpose of building such a service. Or at least significantly reduce it.
Yes, but you asked about scenarios where I am pretty sure the other party has an iDevice. I am not in any way saying that Apple's solution would be superior to existing solutions.
Speaking as a Canadian, I can already use email to transfer money to almost any other Canadian, because our cartel of banks use a common system.
Everything Apple has ever done historically (with mobile) has been iOS-only, what possible reason would there be to suspect this would be any different?
I doubt it. I think Apple Music is a trojan horse (much like the original iPod) to get people using their music service.
They MAY release the payment stuff for Android (so users can receive payments) but I doubt they want to be a general payment provider for Android users.
Don't Apple Pay and Android Pay operate almost identically now? The original Google Wallet/Pay implementation which I used years ago via NFC was different. I don't believe the Android Pay name change is just branding.
And given the number of Android devices in the wild far, far surpasses the number of iOS devices... using this service seems like more of a hassle than not.
And given the number of Android devices in the wild far, far surpasses the number of iOS devices
That's obviously true globally, but not for some of their more important markets. iOS and Android are roughly equivalent in the US for example, with the latter having maybe 10% more of the market – I think?
While there's no doubt that instant money transfers are particularly useful in less developed markets, it's not like it wouldn't still be a useful service in the US.
One of the key differences here (for me at least) between an apple only app (assuming that is the case) and something like square cash is that if the person I want to send money to doesn't have an iPhone, I wouldn't be able to send them money, whereas if they don't have square cash I can tell them to download it and then send them money and with the current promotion, even get $5 for referring them.
Fair, my thought process always seems to conclude that having multiple apps is a downside, but that argument really doesn't hold up well once I consciously think about that fact.
In NYC, iPhone users seem pretty heavily concentrated in Manhattan. This means certain groups of people are probably hanging out in nearly entirely iPhone user enclaves. [0]
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?
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.
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.
I saw his question as 'why would I want an iPhone only service', so that's what I answered.
Venmo may have great market share among people using apps to pay friends. I'm suggesting the total pool of people is MUCH bigger and Apple could take a good chunk of those people, not unlike when the smartphone, tablet, MP3 player, or digital music store markets got MUCH bigger. Will they take it all? No. Probably not even 'most'. But there is still a large opportunity there.
I've never used Venmo, but I wonder if they'll survive or end up a player that was there too soon or at the start but is overtaken by the 2nd wave.
There are plenty of companies/brands that fit that model. Diamond Rio, Palm, ICQ, Blackberry...
Or maybe the banks will come in and crush this market somehow. I know many are trying (BoA, Chase, USAA), but they may not get the UX to work well or be willing to cooperate between banks.
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.
I guess the hard part is that agreements need to be made to reach standards. And since everybody would like to be the "gatekeeper" of a payment service, this is particularly difficult.
By the way, I'm also still waiting for a password manager in my watch that seamlessly integrates with my desktop/laptop computer.
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).
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?
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?
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.
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.
It's not just bay area. I'm in Boston, and around here everyone under 30 seems to know of (and mostly use) Venmo, and many technically inclined older folk.
Interested to hear why you think it's unimpressive. It just works, and it adds a fun, social element to payments without being creepy or annoying about it.
The key to the product is the strength of the network. They got all the major banks and CC providers to sign onto the platform, which was unprecedented. So from that standpoint, it's a fantastic product.
I don't think it's bad at all. You're right that it does exactly what it says it does and that's cool, but that doesn't make it impressive.
It's not particularly well designed, I don't know why there's a social dimension to it, etc. I don't think every product needs to be impressive and I don't mean it as a dig on Venmo. Just that if there IS a way to fill this niche in an "impressive" way, Venmo isn't it.
Edit: Actually Square Cash is pretty damn impressive. Emailing cash instantly with no need for accounts? That's baller.
> 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.
insert chuckle here
Perhaps because Apple has incredible resources compared to Venmo, no one over 30 uses Venmo, and because Apple can easily integrate with the ACH system to enable these transfers.
If Apple were so inclined, they go so far as to have a banking subsidiary that was a stakeholder in the ACH system, thereby allowing them to shape the protocol currently being worked on to allow real time ACH transfers.
Sure, but you might have made the same argument with Facebook when it launched "Poke" (2012) and "Slingshot" (2014) in order to compete with newcomer Snapchat, and we see how that turned out due to poor execution and the incumbency factor.
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
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.
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.
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.
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.
I know this is anecdotal, but everyone I know uses Venmo. I have never met anyone who uses Square Cash or Messenger, and I have both apps. To be fair, I don't know anyone in the US that uses WhatsApp, but all my friends in Europe use it. So, maybe it's a regional thing? I would love to see real usage statistics on those.
I think it depends on the circles you run in. I think clusters of friends and family members probably use different services. My extended extended group of 100+ people all use Venmo (can tell by activity in Venmo feed).
That being said, I ran into someone recently who uses Square Cash with all her friends, but that's the first person I've hear using Square Cash (I downloaded it when it came out but no one else was using it.)
A very interesting real-world example of the network effect among second tier services. Second tier as is not FB, Pinterest, LinkedIn.
It's definitely anecdotal, and as a sibling poster said, it depends on your circles. Mine anecdotally happens to be all square cash and no venmo given the ease of setup for square cash.
I don't see at all how this is in competition with any cryptocurrency. This is competing with the likes of Square Cash (via app/snapchat), facebook messenger, venmo, etc...
Bitcoin is not a very practical option for the general public because there are various scenarios where the user can permanently lose their money without the possibility of recovery. There are many techniques for keeping bitcoin secure, but even something as simple as sending money to the wrong address can cause a permanent loss of funds which is a serious problem in the context of social engineering attacks and technical issues related to preventing one's wallet from being stolen/lost/deleted/corrupted.
Another problem is that the plethora of online wallet services and mobile clients means that the user has to take responsibility for vetting the software or service they use to participate in the bitcoin economy. This ends up being very risky because developers are not legally responsible for loss of funds due to software errors, poor security or something more sinister.
On the other hand, the relatively strict and standardized operating procedures of the banks keeps customer money safe in practice and a trusted brand like Apple is held to a higher standard with regard to the trustworthiness of their software.
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.
There are cryptocurrencies now with more scalable architectures... I'm just counting my blessings that Apple is foolish enough to build another centralized system that is sure to be hobbled by AML requirements and misguided fraud-prevention measures.
Having a centrally-mediated, proprietary cryptocurrency endorsed by Apple/Google/Amazon/Facebook is the worst thing that could happen to the cryptocurrency community right now, so I'm glad none of these companies are pursuing this opportunity yet.
Payment channels combined with the lightning network (https://www.youtube.com/watch?v=8zVzw912wPo) would allow Apple to create create off-chain transactions and aggregate micropayments into individual bitcoin transactions.
However, unless Apple has had a secret bitcoin project going on for the past few years, it's too early to deploy something like this. Their first person-to-person product certainly wouldn't use a cryptocurrency.
If 10 million people today used off-chain, their transactions wouldn't complete until 16 days later. If 10 million people then used off chain tomorrow, their transactions wouldn't go through until 32 days later.
t+22 days and you're already waiting a year to get paid in some instances.
That's not how it works; if you checkout the presentation, you'll see it's possible for the lightning network to enable transactions that don't ever need to be broadcast to the blockchain.
We're not there yet; this would require additional op codes to be added to get the full capabilities.
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.
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)
The payments will need the appearance of being inexpensive/free, so Apple needs to first use network effects to capture a chunk of the market, then they will strong-arm Banks into paying fees to Apple (They need to earn their 3% or whatever on every payment somehow) which the banks will then indirectly forward to customers.
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.