Roger Fingas
If Apple does indeed get into rumored person-to-person money transfers via Apple Pay, the company stands to lose money on each transaction in the short term, accepting the losses as a way to further drive adoption of its mobile payment service, analysts believe.
Setting up and validating a new account could cost Apple between 50 cents and $3, on top of which Apple would have to pay at least 25 cents per transaction, research firm Crone Consulting commented to Bloomberg on Tuesday. In general companies such as PayPal don't generate much revenue from P2P, and pull in money from business transactions instead.
Any Apple involvement in P2P would likely just be a means of encouraging Apple Pay adoption, with the hopes of the increased usage spilling into retail. Crone speculated that adding P2P could double usage of Apple Pay by iPhone owners within 18 to 24 months. This is partly because P2P services are "viral" applications, meaning that someone sent cash through an app often has to register with the same app to receive it.
In November, Apple was reported to have spoken to several banks about P2P transfers. The company might even partner with an existing network, clearXchange, which already has the support of banks. In any case, Apple is not expected to charge financial institutions for personal transfers.
If it does enter the market, Apple will face stiff competition. Apart from PayPal and its Venmo subsidiary, which control much of the mobile payment space, companies like Square and even Facebook have entered into the arena.
Andrew Orr
Christine McKee
Sponsored Content
Wesley Hilliard
AppleInsider Staff
Amber Neely
13 Comments
There's absolutely no reason to assume Apple would lose any money on such a service. Just more bloviation and muddying of the waters by unqualified "experts". ????
This is silly.
Apple also loses money on every iMessage.
Apple also loses money on every iCloud email.
This is another 'free' service that Apple loses money on to strengthen the ecosystem and sell more devices.
Agreed.
They are perhaps the only company that could lure people away from using a service that is already is offered by individual banks and that actually work quite well. Many people hate signing up for yet another service account, but a lot of people already have icloud accounts.
This is silly.
Apple also loses money on every iMessage.
Apple also loses money on every iCloud email.
This is another 'free' service that Apple loses money on to strengthen the ecosystem and sell more devices.
Exactly. This is like saying grocery stores are losing money on bags.
iMessage (for better or worse) has blurred the line to SMS for many unsophisticated users to the point that those who switch to Android may feel excluded because several of their iPhone friends use iMessage instead of SMS. I know three HS and college-aged people who switched back to iPhone just so their stupid friends could "text" them again.
THAT is leveraging a strong product position for "free" software.
Apple lost money on El Capitan, too. Think how much that cost to make and deploy, and they gave it away for free.
I like AI, and learn a lot from it. But someone needs to hire an editor.
Apple lost money on El Capitan, too. Think how much that cost to make and deploy, and they gave it away for free.
I like AI, and learn a lot from it. But someone needs to hire an editor.
Well yeah but it is required moving forward as the OS for all new Macs. The free upgrade for existing customers just costs bandwidth.