Apple Pay takes on Venmo with personal money transfers

The peer-to-peer payments service is available directly through iMessage.

Ben Fox Rubin Former senior reporter
Ben Fox Rubin was a senior reporter for CNET News in Manhattan, reporting on Amazon, e-commerce and mobile payments. He previously worked as a reporter for The Wall Street Journal and got his start at newspapers in New York, Connecticut and Massachusetts.
Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Ben Fox Rubin
Shara Tibken
2 min read
Watch this: Apple Pay lets you send money to friends and family

Soon you'll be able to pay your friend for that ski trip using Apple Pay.

Apple on Monday showed off a new person-to-person payment system. The new service allows users to send and receive money inside Apple's iMessage app. Users can then authenticate payments with Apple's Touch ID fingerprint sensor. 

If you get money from someone, it gets stored on an Apple Pay Cash Card until you withdraw it or transfer it to someone else. 

The service, which was unveiled at Apple's annual Worldwide Developers Conference on Monday, will be available across all iOS devices and Apple Watch. It will launch first in the US this fall. 

Apple Pay launched in the US in October 2014 as Apple's first venture into contactless mobile payments. Using an a newer iPhone or Apple Watch, you can pay for items on the go at supported retailers via NFC technology. You also can use Apple Pay to make purchases in apps without having to enter your credit card information each time. And with last year's Mac OS Sierra, Apple Pay became available on Apple computers.

Mobile payments were slow to take off, but the feature is now expanding rapidly across the globe. Many more people are using their smartphones and smartwatches to buy items in stores now that three of the biggest tech companies in the world -- Apple, Google and Samsung -- have introduced mobile-payments platforms. 

Apple on Monday said Apple Pay's accepted at 50 percent of US retailers, totaling about 5 million locations. 

The new peer-to-peer aspect of Apple Pay might entice more people to use the service, which would help Apple compete more with PayPal's Venmo, a leader in peer-to-peer payments in the US. 

Traditional banks and Square have been pushing their own money transfer services, too.

With the new service, you can make payments using debit or credit cards in your Apple Wallet. When you receive money, it goes into a "cash card," which you can use to make payments to friends and family, make Apple Pay purchases on the web or transfer the funds to your bank.

If you use a debit card or the Apple cash card to pay for items, you won't have any fees. If you use a credit card, you'll have a 3 percent fee for each transaction. 

If you're an Android user, though, you're out of luck. Apple Pay's peer-to-peer payment system only works between Apple devices.

First published June 5 at 11:17 a.m. PT.
Update, 3:50 p.m. PT: Adds details. 

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