What it is: The latest version of iOS 11.2 includes Apple Pay Cash for US residents.
Kenya has been on the forefront of mobile banking for years with M-PESA, which let people send and receive money without going to a bank and carrying cash that could be lost or stolen. M-PESA took off in Kenya precisely because people lacked access to banks. Now the idea of mobile payment has finally arrived in America with the introduction of Apple Pay Cash.
The idea is simple. Two people set up an Apple Pay account for free, which links to a credit card or debit card account. Now you can send money through Apple Pay Cash and iMessage to another person who also has an Apple Pay account. There’s no transfer fee beyond the 3% transaction fee every credit card issuer charges, but if you send money through a debit card, you won’t pay any transaction fee at all.
This means you can freely send and receive money without carrying cash that could be lost or stolen, just like M-PESA. To validate payment, you can use TouchID or FaceID to verify your fingerprint or face before sending the money to someone else. Apple Pay Cash will simply help iPhone and iPad users share money within the iOS ecosystem. That means if someone else uses Android, they’ll have to rely on a rival mobile payment service like SquareCash.
This means most iPhone/iPad users will rely on Apple Pay Cash, which will immediately vault Apple Pay Cash to a prominent position in the number of users. Once you start relying on Apple Pay and Apple Pay Cash to transfer money between people, you’ll have a harder time switching to Android. Apple Pay Cash isn’t just a convenience feature but another way to keep people glued to iOS.
Such fast and rapid payments between iOS devices means paying transaction fees through Western Union money orders or similar services is now obsolete. When you can send money quickly and easily through Apple Pay Cash, why would you want to use any other service unless you don’t have a credit card or debit card? This will motivate more people into getting a credit card or debit card just so they can use Apple Pay and Apple Pay Cash.
Apple Pay Cash won’t be for everyone since not everyone wants an iPhone or iPad, and not everyone has a credit card or debit card. This still leaves room for rivals to thrive, especially on Android, but within the iOS ecosystem, Apple Pay Cash will dominate simply because it has the backing of Apple. Apple Pay Cash will be fast, inexpensive, and secure, which are three claims rival services may not be able to match.
Money is becoming less important over time in the form fo paper and coins. Nowadays, money is mostly on credit cards and debit cards, and soon it will be digital in the form of Apple Pay Cash. As more retailers accept Apple Pay, Apple Pay Cash will only get more popular over time. One day, you’ll be able to leave your wallet behind and store everything on your iPhone. Just make sure you don’t lose your iPhone.