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Can Apple convince customers to pay each other on their iPhones?

Need to pay your friend, your coworker or your babysitter, but
don’t have cash on you? There’s yet another app for that.

Apple (AAPL) announced Monday at its developer conference it
would begin allowing peer-to-peer payments by sending a message
through its iMessage app
. It will let consumers pay one
another without leaving their messaging thread. Apple will also
offer a digital debit card called Apple Pay Cash, where users
can store their money online.

The service will become available at the same time as Apple’s new iOS 11 operating
system this fall
, according to Recode. Apple did not
immediately respond to MarketWatch’s request for comment.
Consumers can already send one
another money
through Facebook’s


  Messenger app, which is probably the most
similar peer-to-peer payments service currently available.

There is also a myriad of apps that allow you to pay a friend
for a dinner or movie ticket using a smartphone, but experts
said Apple’s offering could make them more mainstream. Mobile
peer-to-peer payments are projected to quadruple between 2016
and 2021, according to the research firm Forrester. Forrester
sees digital payments, including in-app purchases, peer-to-peer
payments and retail purchases, reaching $283 billion by 2021,
up from an estimated $112 billion at the end of 2016, Barron’s Next reported in

One of the largest and fastest-growing is PayPal’s


  Venmo, which processed $6.8 billion in
transactions in the first quarter of 2017 alone, a 114%
increase since the first quarter of 2016. And like Apple’s new
peer-to-peer system, Venmo is currently available within
iMessage. It is also available as a separate app that consumers
can use. They must link a credit card or bank account with the
service to use it. It is free to use.

Financial institutions are not standing idly by. Several banks
have also been working together as part of an organization
called Early Warning, and have developed a competitor called
that allows consumers who use different banks to pay
one another. Google also allows consumers to pay one another on Google
. And Square Cash also allows peer-to-peer payments
and is
available already through iMessage

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The big difference between these and Apple Pay Cash: Apple’s
service will be downloaded as part of the iOS upgrade, just
like Photos or Maps. Apple’s new addition could make more
consumers aware of the various ways they can use their phones
to pay one another, “helping to raise the rising tide of peer
to peer payments,” said Mark Ranta, the head of digital
payments at ACI Worldwide


 , a payment systems company.

Consumers may also appreciate being able to stay within
iMessage to complete their transaction, rather than having to
visit a separate app, which often has its own password or other
type of authentication, Ranta said.

But there are a few obvious drawbacks to Apple’s service, said
Brendan Miller, a principal analyst at Forrester. Only
consumers who have Apple devices, which use iMessage, will be
able to use it, he said. And not all of those who have those
devices have even registered for Apple Pay. That might make it
less desirable than a service like Venmo, which they can use
regardless of which device they have. “Venmo is not going away
anytime soon,” he said.

Indeed, after Apple’s announcement, a spokesman for Venmo
remained unfazed by Apple’s announcement. “We welcome any
developments that help people move away from the awkwardness of
cash,” he said.

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