Smart phone

Apple’s late arrival to the P2P party is either highly prescient or oddly low-key. Source:

Apple’s P2P is a damp squib – and here’s why

READERS in the APAC region will be well aware – and possibly everyday users – of person-to-person electronic payments via apps on their smartphones.

Dependent on country, WeChat Pay, Tap & Go, Jetco Pay, Alipay and GrabPay are as common as they are secure. In fact, plastic debit or credit card use is falling in the region.

In the United States and Europe, P2P payments are nowhere near as ubiquitous. Consumers in the US still often expect to swipe and sign using ‘traditional’ cards in stores, while services such as ApplePay are far from accepted everywhere.

Some of the reasons behind this disparity may be to do with the mini-programs-within-an-app model, as so successfully propagated by Tencent’s WeChat, and more recently Alipay. This model keeps users inside a single app’s eco-system, where they can do most everyday activities, such as chat, exchange media, play games, shop and of course pay.

Jack Ma

Jack Ma’s Alipay allows users to access mini-programs by scanning a QR code. Source: Alibaba

For consumers, the experience inside one app is highly convenient and relies on a single login. It offers a joined-up experience without the trouble of switching between disparate apps.

For the giant tech firms creating the apps, it is, of course, good business. In fact, very good business.

Recently, Facebook’s new product development team has been looking at so-called ‘red envelope’ P2P payments, which will in all likelihood be available inside the Facebook walled garden. In this, Mark Zuckerberg’s company is mimicking the success of the Tencents of this world.

With Google largely out of the picture in China (and therefore arguably disregardable for the time being in APAC) and Microsoft, IBM, Cisco and Oracle not present at all in the payments market, Western observers are looking to Apple to come up with a payment solution that will, like Bilbo’s ring, “rule them all”.

Apple’s successful strategy of yore has been to hold back a little, see how the market plays out and then storm in with a killer version of a nascent technology: computer operating systems (born of Xerox), phones (born of Nokia & Motorola) and tablets (born of netbooks – remember them?)

Xerox Alto

On the shoulders of giants. Apple’s OS is rumored to be built on the mighty Alto’s blueprint. Source: Computer History Museum/Xerox

The Cupertino giant’s beta version of iOS, currently with testers, is now offering Apple Pay Cash, which while possessing all the hallmarks of a typically seamless Apple experience, is at least for now, pretty limited.

For starters, the service is US-only: but, as the system is in beta, Apple may be forgiven on that score. But what alarms some commentators is that Apple Pay Cash can only be used iPhone to iPhone. If the friends to whom you are indebted are Android users, they will have to wait until you can get to the bank.

Apple’s solution looks like it may be, as it stands, a useful gimmick for iPhone aficionados – a value-added feature for occasional use among tech-savvy cognoscenti.

The Apple Pay Cash feature is essentially a pre-paid credit card (from US-only Green Dot) which takes its place alongside other cards registered in the Wallet app. Person-to-person payments are, despite the trappings, one prepaid card’s account crediting or debiting another.

Although still in beta, Apple’s sights do not appear to be set very high at present and it is difficult to see where the company’s payment tech strategy is heading. Jack Ma and Martin Lau will be sleeping soundly for some time to come.

Perhaps Apple’s deliberately low-key approach to what is effectively an electronic adjunct to ‘traditional’ banking methods is born of their prescience with regards cryptocurrencies, which, as informed parties well know, spell the end for traditional banking over the next few years.

After all, why build and invest in an infrastructure that is built on a financial system destined for the history books?