Apple Inc. and some bank conglomerates are now in talks of developing a means for person-to-person payment through Apple-manufactured products, and Paypal could actually be seeing some tight competition soon.
Paypal currently consists of 49 percent of all online banking and payments done wallet-free. If Apple's plans come through smoothly, users could be seeing a new peer-to-peer payment system that would match PayPal Holdings Inc.'s Venmo platform, which has grown in popularity amongst the youth, according to The Wall Street Journal.
So far, talks are merely in the beginning phases, and there is still much to look forward to. However, with Apple - arguably one of the biggest companies today - coming into the finch picture, users can expect big waves to occur, says Payment Week.
Norm Merritt, CEO & President of ShopKeep, comments that Apple coming into the finance tech atmosphere is "gas to the Apple Pay fire" and will most probably drive more adoption of the Apple online payment system.
The person-to-person payment system by Apple will allow users to easily transfer funds without transacting through a bank. This has various applications such as paying the babysitter, splitting a restaurant bill and giving kids lunch money.
Apple currently has 100 million iPhones out alive and running, a third of that number being Apple Pay ready, The Motley Fool shares. This gives Apple a clear advantage in launching a full-scale peer-to-peer payment system. It is not yet clear how Apple will be making money out of the peer-to-peer payment system, but reports suggest that it will most probably be most compelling if Apple offered it with the same revenue-creating strategy that Paypal has.
Initial talks have been made by Apple with banks, such as J.P. Morgan Chase & Co., Capital One Financial Corp., Wells Fargo & Co. and U.S. Bancorp.
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