Anyone with an interest in the technology market is probably aware that Apple Inc. (NASDAQ:$AAPL) just had their 2017 Worldwide Developers Conference earlier this month. Along with the announcements of iOS11 and a 10.5 inch iPad Pro, Apple announced that there will be peer-to-peer (P2P) payments coming to Apple Play. Merging peer-to-peer payments into iMessage, which is most iOS users main messaging platform, will allow the California-based company to obtain a dominant role in the world of P2P payments. This is extremely important as Apple will be making this transition during a time that Venmo, who is owned by Paypal (NASDAQ: $PYPL), is experiencing booming growth in total payments volume (TPV).
Keep in mind that Apple teams up with banks and other financial facilities so they can develop and enable their P2P service, and of course, these institutions don’t want to be tossed aside as soon as the camera gets pulled out.
Introducing Zelle
Over 30 financial institutions have come together to create Zelle, which is a digital payment network that links financial institutions so it is easier, faster, and safer to send and receive money. The service was officially revealed in early 2017, but banks have spent a total of six years developing the network, with most of the focus being on back-end infrastructure.
One of the main features of Zelle payments will be how fast the payments are processed. Generally speaking, users send payments over Venmo (or similar networks) and this takes a few days for it to be processed and documented in the user’s bank account.
Venmo bank transfers, for instance, are handled as common ACH transfers. These transfers take a few days to process but the upside is that these transfers have low fees. It has been speculated that when users send funds from their Apple Pay Cash accounts to their bank accounts, this will use ACH transfers. According to Zelle, P2P payments that are processed through their service will be recorded in both source and destination accounts in just a couple minutes.
As of June 12, 2017, Zelle’s digital payment service is now live within major mobile banking apps. It’s important to note that because Zelle doesn’t have a mobile app (in due time, it will be out later this year), users have to go to their bank’s mobile app and process peer-to-peer payments from there via Zelle’s service.
Will Zelle’s speed make a difference?
All three are involved in P2P services, but Zelle, Apple Pay P2P, and Venmo have their own unique advantages. Venmo, for instance, adds a social dynamic to its P2P service by showing a feed of payment activity amongst friends. On the other hand, Apple Pay P2P is probably going to be easier to function, more perceptive and thanks to Touch ID, more protected. Plus, Apple Pay P2P should be able to reach a massive scale after iOS 11 is distributed across millions of iOS devices later in the year.
What remains unanswered, however, is which of these users will be valued the most. For instance, Zelle might lack consistency as it is being carried out on a number of apps. If you’re interested in the technology market, just remember that none of the services mentioned are mutually exclusive and like always, having a variety of investment options is always beneficial.
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