Apple (NASDAQ:AAPL) has a knack for coming into markets a bit late, but offering something innovative to drive user adoption. Unfortunately, such is not the case with its peer-to-peer (P2P) payments service announced at its Worldwide Developers Conference earlier this month. Apple is entering the market years after Venmo — which PayPal (NASDAQ:PYPL) acquired in 2013 — and Square‘s (NYSE:SQ) Square Cash.
Its one advantage is that it’s built right into iOS. When it comes to network-based services, however, that can be more of a challenge than an advantage, though. Granted, Apple’s goals with peer-to-peer payments are different than PayPal’s or Square’s. Apple isn’t looking to make a direct profit off of payments; it’s just looking for another way to lock users into its ecosystem. Still, it doesn’t make Apple much of a threat to other payment services.
The most popular messaging app didn’t make a dent
Facebook (NASDAQ:FB) introduced P2P payments in Messenger in the first quarter of 2015. It was fast, easy, and readily available to over 600 million users. All they have to do is connect a debit card — the same requirements of Venmo and Square Cash. Messenger’s users have since doubled to 1.2 billion.
Nonetheless, payments in Messenger haven’t slowed down the growth of incumbent P2P solutions. Venmo’s total payment volume grew from approximately $1.3 billion in the first quarter of 2015 to $6.8 billion last quarter. Square doesn’t report payment volume for Square Cash, but it does note that its costs associated with the product continue climbing, up $4.7 million last year and $18 million in 2015.
This trend begs the question: If the integration of payments in the most popular messaging app in the world hasn’t make a dent in Venmo or Square, why would Apple be any different? Unlike Messenger, iMessage is only available on iPhone. It’s a lot bigger of an ask to get…