Apple ventures into new territory with its latest move to patent a Wallet App person-to-person (P2P) payment feature that will let iPhone users transmit money to each other directly.

This added feature would cut out the middleman and make PayPal and Venmo obsolete, potentially seriously harming both companies.

According to Patently Apple, "Apple's invention generally relates to wireless communications, wireless electronic devices and more specifically to techniques for conducting financial transactions by communicating encrypted financial credentials between the wireless electronic devices."

The way the proposed app works is fairly straightforward. After opening the Wallet app the user chooses one of their credit cards linked to it, types in the amount, chooses the iPhone user recipient and finally authenticates the transaction via fingerprint or the iPhone's passcode. An encrypted payment package is then sent to the receiving iPhone user.

There is nothing particularly cutting-edge about the technical side of the process. The potential economic implications of this proposed added feature, however, are huge, especially for PayPal and Venmo who hold much of the market share in the mobile payment sector so far.

This market is all about innovation and user- riendliness. Traditional banks, being too risk-averse and slow-moving have been losing out already. Potentially PayPal and Venmo could be next, if overtaken by a more convenient, extra-safe and cheaper Apple P2P system.

Adding P2P payments would take Apple one step closer to turning into a future veritable one-stop bank for its users, a concept that is at least conceivable.

The market for P2P transmission is enormous and swiftly expanding. It is therefore not surprising that Apple wants a share of it. The first move has been made now with the patent application for Apple's very own P2P Payment system. Whether Apple will actually implement its new technology in the near future remains to be seen, as it could also simply be a means of stopping a competitor from using this same type of feature. At some point though, Apple is bound to take this step, much to the detriment of PayPal and Venmo. 

Photo: Omar Jordan Fawahl | Flickr 

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