New Apple Person-to-Person Payment System Announced

At the Worldwide Developer Conference 2017 (WWDC17) Apple announced it’s going to release a new person-to-person payment system with iOS 11 this fall. The new payment system will allow you to send payments through the iMessage app.

This is not to be confused with Apple Pay. Apple Pay allows you load a number of credit cards into your phone so that you can process transactions wirelessly at different retailers. This mobile wallet system has been popular for those with cards like the US Bank Altitude Reserve who can earn 3X by utilizing mobile payments.

This person-to-person payment system will function closer to how PayPal, Venmo, and others work, however. The difference is that it’s going to be even more convenient (for Apple users) to use since you can send payments through iMessage. Not having to involve a third party app will speed up the process and make things like splitting bills that much easier for iPhone users.

How it works

It looks like it will work very simply. You’ll first choose a specific amount of money via a new button and then choose whether to send that amount or request that amount of money from someone else. If you’re making a payment, you’ll need to first have a card synced to Apple Pay.

It also looks like you might just be able to text someone that they owe you $20 and their keyboard will auto populate an Apple Pay button for them to proceed with payment.

The funds will be loaded to your Apple Pay Cash Card, which can then be transferred to your bank account, just like other services allow. I’m wondering if you’ll also be able to use funds for Apple Pay as well, but I haven’t heard anything confirming that.

Are there going to be fees?

We haven’t heard what the fees and caps to these services will be. It’s possible that for debit cards there won’t be any fees and that for credit cards we’ll see the standard fee rate of somewhere between 2% and 3%. Some have speculated that there may be no fees incurred, but I’m hesitant to be that optimistic.

Update: it looks like fees for credit cards will be set at 3%.

And then there are caps — nobody knows if there might be a monthly cap on transactions or perhaps a limit per transaction. I’m definitely expecting both fees and caps but we’ll see what Apple does.

This new payment system could present more effecient ways to obtain sign-up bonuses for many, so this is definitely a big plus for iPhone users and I’m excited to find out more details about the payment system. It might also present a new way to liquidate certain gift cards, which could be huge for many people. It’s worth noting that Green Dot is behind this new payment system and they don’t tend to have much tolerance for “creative” uses, so alternative uses of this might be limited.