Apple reportedly considering person-to-person payments

The company is looking to expand Apple Pay into a new domain of financial transactions: direct payments between individuals.

Katie Collins Senior European Correspondent
Katie a UK-based news reporter and features writer. Officially, she is CNET's European correspondent, covering tech policy and Big Tech in the EU and UK. Unofficially, she serves as CNET's Taylor Swift correspondent. You can also find her writing about tech for good, ethics and human rights, the climate crisis, robots, travel and digital culture. She was once described a "living synth" by London's Evening Standard for having a microchip injected into her hand.
Katie Collins
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Apple Pay transactions could happen between two phone owners, if the company has its way.


Apple is reportedly talking to US banks about introducing a payment system that would let people transfer money directly to each other via nearby smartphones.

Apple's patent application for an encrypted person-to-person payment system was published in July. Apple's negotiations to build such a service include major banks such as J.P. Morgan Chase, Capital One Financial, Wells Fargo and US Bancorp, according to a Wall Street Journal report Wednesday that cited unnamed sources.

It's not yet clear whether the Cupertino, California-based company has managed to strike any deals yet. Details such as how the payment technology will work alongside existing banking infrastructure still must be negotiated, the report said.

The iPhone has been a huge success for the company as a standalone device, but new features and services like Apple Music and Apple Pay are efforts to add new value for smartphone owners and new revenue sources for Apple. The company launched the Apple Pay mobile payments system in October 2014. So far, iPhone users can only make purchases at businesses equipped with a specific payment terminal.

Person-to-person phone payments have been common in some parts of the world for several years. Kenya's widely used M-Pesa service, launched in 2007, allows people to transfer money to others using a text messaging system on any mobile phone. Whereas M-Pesa was built as a solution for transferring money easily over long distances and for those who may not have access to a traditional bank account, an Apple approach would likely require the two phones to be close together and be tied into users' existing bank accounts, if it were to follow the same model as the existing Apple Pay system.

Apple did not respond to a request for comment.

If Apple succeeds in launching and popularizing such a system, it would lead to a big shift in people's payment habits. As of 2014, cash remained the most popular way for one person to pay another person, according to a report from analyst firm Aite Group.

The most popular electronic means of person-to-person payments last year was PayPal, the report said. Of people who had transferred money to others, Aite said, 49 percent had used the online payments service. Thirty-nine percent had used online banking to do so. Only 20 percent had used mobile banking and only around 6 percent had used a dedicated mobile payment service like Venmo or Square for a non-business payment to another person.

Mobile payments have started to catch on in the US and Europe over the past 12 months. This is, in part, due to Apple, as well as Samsung and Google, which offer rival payment systems. Just as Apple used its brand to create awareness about mobile payment technology, so might it be the case with person-to-person payments. Having the feature built into Apple's future mobile software would likely make it a more mainstream way of settling a debt.