Leveraging its smartphone install base and the popularity of messaging Apple is bringing its Apple Pay Cash feature to market with its iOS 11.2. Currently available to those in the iOS beta program, Apple Pay Cash will offer stiff competition to Venmo, owned by PayPal (PYPL) as well as other “send cash” apps like Zelle used by JPMorgan Chase (JPM), PopMoney at Citi (C) and others that allow you to send-and-receive money virtually between you and friends. While fees associated with this will be akin to collecting cookie crumbs, given Apple’s install base this has the potential to be positive contributor to Apple’s burgeoning Service business.
Apple is soft-launching direct, person-to-person payments in an iMessage today with the Apple Pay Cash beta. The feature, which was announced earlier this year, allows you to send and receive cash inside the Messages app on iPhones.
The program is launching in public beta today on iOS 11.2 beta 2, and you can opt in using the iOS Public Beta program here. Once you’ve updated, you’ll see an Apple Pay button in the apps section of Messages that allows you to initiate a payment. Payments can also be triggered by simply asking for money in a message or tapping on a message sent by someone else asking for money.
The source of funding is any debit or credit card you have currently added to Apple Pay. Apple will charge no fees for money that is funded via debit cards and an ‘industry standard’ fee for credit cards, likely in the few percent.
This card can only be used to send money or pay for things via Apple Pay, so it’s not a completely discrete “credit/cash card”, but it functions as one as long as you’re within Apple Pay. The reason for the card is multi-faceted, but one big one is that this allows Apple to fund payments to the card immediately. This means that when you get paid via Apple Cash, you’re going to be able to spend that money right away as long as it’s via Apple Cash to someone else or via Apple Pay at a retailer or website that accepts it.
Apple is working with Green Dot to power the financial mechanics of Apple Cash.
The most widely-followed home price index, the S&P/Case-Shiller index, just came out on 5/31 and showed that we are officially in a double dip. The report found that home prices in Q1 are now 2.9% below the previous quarterly bottom in Q1 of 2009. So much for that home buyer tax credit! All those gains have now been wiped out. Both the 20-City composite index and the 10-City Composite Index show housing prices are back to their summer 2003 levels.
Home prices have now fallen more than they did during the Great Depression. The drop in home values means also mean that the banks’ portfolio of loans is worth less. If this continues, banks will be forced to take further markdowns. The further prices fall, the more the banks stand to suffer, which could imply, according to Chris Whalen of Institutional Risk Analytics, solvency issues for firms like Bank of America, Wells Fargo, JPMorgan and Citigroup as well as big losses for the U.S. government and private investors.
This provides further reason to believe that the Fed will not be raising rates anytime soon.