An Apple Pay Peer-to-Peer Push May Spell Disaster for PayPal, Venmo, and Others

For some time now, Apple has seemingly been focused on consumer transactions with Apple Pay, going after a host of retailers to make it a lot easier for users to find value in this still comparatively new mobile payment option.

But one thing was conspicuously missing: the ability to pay everyday people in the same way that those people would pay a business. A new Apple patent, meanwhile, suggests that that particular point might be coming soon, and that means bad news for some of the biggest names in the field right now, ranging from Venmo to Square Cash to even PayPal itself.

Reports suggest that the new patent in question will allow one user to send cash directly to another user via Apple Pay, making it as simple as opening an app, selecting a credit card, and typing in the amount desired.

An Apple passcode or a fingerprint scan serves as authentication, and a complete payment “packet” is sent to the user, including things like the payment amount, the relevant verification, and what’s known as a “credential,” which provides the necessary credit card details.

With this development, Apple Pay makes the complete jump into being a mobile wallet system, allowing users to treat credit and debit card units like actual cash, and the new Apple Pay system would even allow users to make payments from prepaid cards of all stripes, even including gift cards. This opens up a lot of new potential opportunities for Apple, and poses a real threat to several other companies.

Apple Pay was never really a big deal when it came to anything outside of the retailer/customer connection, and this left a nice big field for companies like Venmo, Square Cash, and PayPal to carry on unimpeded by anything more than each other.

If Apple Pay, with its substantial user base and wide name recognition, suddenly steps into that market, that’s a whole lot of users who will probably depart the other services in favor of the service such people are already using in stores. That’s not good news, and the various other services in the field will likely have to scramble to develop sufficient competitive advantage to keep users in the fold even in the midst of a huge potential exodus.

Of course, the potential good news here is that Apple patents don’t often develop into reality.

Those who follow the tech space routinely know that Apple patents come out every so often, but only turn into actual items maybe one time in five, if that. This could be a pre-emptive patent, with Apple out to block competitors from using a similar method to send peer-to-peer payments.

Or this could be Apple Pay stepping into a big new market. I can’t imagine this destroying PayPal; separate firm or no, its eBay connection is going to serve it well.

Plus, it’s already too widely used to see a lot of people jump ship to Apple Pay. Venmo, however, may be in for some real trouble with this; it’s already taken a few hits on the strength of its security, and Square Cash may likewise face some pressure.

This is a potentially major development in the field of mobile payments, and if Apple Pay steps into the peer-to-peer market, it may make a change so massive that it takes some businesses with it outright.

It’s worth noting that most Apple patents never see the light of day, but this one could be a seismic shock to the entire mobile payments market.