Apple Forays Into Payments: Could The US Finally Have Easy Peer-To-Peer Payments?

We might finally be able to do what folks in Kenya and India have been doing for years now: send money to each other without hefty fees or writing a check.

This week, Apple hinted at a new payment system that would allow peer-to-peer transfer.  This could be a game changer for payments in America, and far more innovative than Apple Pay.

While mobile money seems to be the future of ‘fintech’ and brick-and-mortar banks are quickly becoming relics (Bank of America announced this year that it will be shutting down more branches in 2016), is the finance sector finally becoming more democratic, inventive, and inclusive, perhaps even poised for radical change?

It depends on where in the world you’re sitting.  

The US might want to take a lesson or two from emerging markets like India and Africa when it comes to defining a bank, and whizzing cash back and forth.  We’re not as cutting-edge as we think we might be.   Apple’s foray into peer-to-peer payments could finally change that– or perhaps we’re just late to the party.

Apple Pay, the latest and most talked about mobile wallet, is built on a technology that’s existed since the 90s: Near-Field Communications, or NFC. By tapping the NFC chip on a receiver, you’re able transfer your credit card data from your phone to the vendor. Is it a radical idea?  Not really, given that your money is still tied to a credit card.

For 26 million Americans, who don’t have a credit card, it’s still out of reach.  Add to that all the millions of people who don’t have an iPhone 6.  Go beyond the US where Apple phones are not as dominant and Apple Pay suddenly loses weight.

Yet, in places like Kenya and India, people have been transferring money from one person to another for nearly a decade now.  These quick, inexpensive peer-to-peer transfers from your cell phone have yet to become the rage in the US.

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