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Apple announced its move into the peer-to-peer payments space at its annual World Wide Developer Conference held in San Jose, California on June 5th. The new capability will compete with other applications that consumers have at their disposal, such as PayPal, SqaureCash, and the all-popular Venmo (owned by PayPal) to pay one another for rent, groceries, or a night out. Along with this new capability that will live inside the iMessage app, Apple also announced that it will have its own digital debit card, aptly named Apple Pay Cash. This effectively one-ups the other major players in the space.

As it stands today, consumers using any peer-to-peer payment solution typically need to either keep their funds within the app to pay others, or deposit their funds to their bank (which typically takes one business day). The exception here is of course PayPal, which consumers can use as a payment method online. There are steps being taken by the likes of Venmo and others to try and break the P2P barrier and increase functionality and usability by allowing businesses to accept these mobile wallets as forms of payment during both physical and eCommerce experiences, though traction is slow.

With Apple Pay Cash, Apple is providing an effective strategy to take P2P payments further. The Apple Pay Cash is a virtual debit card that consumers can use as a payment method anywhere Apple Pay is accepted. Users will now get another option outside of depositing to their bank account, to use the available funds transferred to them by their peers. There are limitations with the service, as it will first only be available in the US and clearly only available on the three Apple devices, iPhone, iPad, and Apple Watch. The new feature is set to debut with iOS 11 in the fall.

What does this mean for consumer payments? We are seeing a shift in the manner consumers are choosing to pay for goods and services. According to Juniper Research, by the end of 2017 Apple Pay, Samsung Pay, and Android Pay (the largest mobile wallets on the market) together are estimated to sign more than 150 million users, with Apple Pay boasting the largest adoption of about 57% of the users. As the adoption of contactless payments grows, Apple Pay, Samsung Pay and Android Pay look to be the leading mechanisms for consumers to engage and utilize contactless payments. The challenge these providers have is not peer-to-peer payments, but rather gaining traction with both physical and eCommerce merchants to adopt their mobile wallets as accepted payment methods. The latest news out of Cupertino, aims to do just that.