Tech —

Apple Pay introduces website payments but punts on peer-to-peer money transfer

The latest announcement may be too incremental to really challenge PayPal.

Apple Pay introduces website payments but punts on peer-to-peer money transfer
Andrew Cunningham

In the keynote presentation of this week's World Wide Developers Conference (WWDC) in San Francisco, Apple announced that it would allow website developers to add an Apple Pay button to the checkout part of their sites. The company also revealed that iMessage will now be open to apps from third-party developers, and one of Apple's spokespeople demonstrated this new openness by sending money to a friend using an iMessage-compatible Square Cash app. Both of these new announcements will make buying things easier in the Apple ecosystem, but neither seems to be the kind of development that will (singlehandedly) propel Apple to dominate the payments market.

Apple's Web-payments function, called “Pay with Apple Pay,” only works in Safari for now. The aim is to reduce any friction a customer might experience while checking out after a little e-shopping spree—the customer just selects the Apple Pay button during checkout and then authenticates the transaction using TouchID on their phone or by tapping an Apple Watch associated with the computer the purchase is being made on. After all, if you don't have to track down your credit card and find the right security code to input, you're less likely to get distracted from your capitalist urges or have time to think about whether you should really be buying a 5lb gummy bear.

That's something PayPal and Amazon have tried to perfect, and although Apple Pay's latest features have been described as challenging PayPal, there's room for some caution in that prediction. Thad Peterson, a Senior Analyst at independent research firm Aite Group, noted that PayPal is global, platform agnostic, and has a 12-year head start on Apple Pay.

Not to mention PayPal isn't the only competition Apple Pay will have on websites—just last month Android announced that it would be making a similar API called PaymentRequest available to Web developers. Android's PaymentRequest will also accept fingerprint authentication and aims to cut down friction in online checkout.

“There are already a lot of payment choices out there and merchants aren’t likely to offer every one, as it creates what is being called the 'NASCAR effect' where the shopping cart/pay window carries a whole bunch of different logos and choices,” Peterson told Ars. “More likely is that merchants will select one or two that have the greatest potential to positively impact sales. I suspect that if the merchant’s offering targets users who are in the Apple/iPhone demographic, they may choose to add Apple Pay, but it will always be in addition to a card-on-file option and/or another buy button like PayPal.”

Peer-to-Peer

Apple also announced on Monday that it would allow developers to make apps that integrate within iMessage, including payment apps like Square Cash. Square Cash, a property of the payments company Square, allows users to send and receive money.

Peer-to-peer payments are an in-demand service for a payment platform to have these days. Recently, PayPal's Venmo has been coronated as the popular money-sending app du jour, and even Android has kept Google Wallet around to let users send cash to their friends' accounts.

But despite rumors to the contrary, Apple did not release a peer-to-peer payments service through Apple Pay. Ars contacted Apple, but the company wouldn't comment on whether we'll ever see peer-to-peer payments through the company's platform.

While some might consider it a missed opportunity for Apple, that's good news for Square and other payments processors like it. iMessage users won't need to open up the payments app after they set up their accounts, and in Square's case specifically, having an early go at creating an app for iMessage is sure to help bring in new users. But as with anything, there's a catch: Venmo could always develop an iMessage app, too.

Channel Ars Technica