Apple is working on a new peer-to-peer payments service that which would let people use their smartphones to send money to one another. The service could be ready as soon as next year.
The new service would be in direct competition with PayPal’s peer-to-peer payments app Venmo and Square’s Square Cash. Square Cash and Venmo are free to users that link their checking account to the system. Consumers using a credit card are only charged a small fee.
Venmo processed nearly $2.4 billion in money transfers in 2014. Square Cash has processed more than $1 billion in money transfers since its launch about two years ago. Square is now preparing for its initial public offering.
Peer-to-peer payment services have been increasing in popularity over the last few years. This year, Facebook offered users of Messenger a payment service that allowed them to send payments to friends. Google is experimenting with payments through its messaging service. Several banks are also trying to implement peer-to-peer payment products within their mobile banking apps.
A peer-to-peer payments product could increase Apple’s Wallet appeal for consumers and increase Apple’s share of the payments industry. Apple sees the peer-to-peer service as a way to involve customers more deeply with its products and to give them a product that allows them to leave their wallets at home.