Digital Transformation

Apple has filed a patent for a new feature that could kill off mobile payment apps like Venmo, Paypal, and Square Cash

By Business Insider | Reporter

July 6, 2015 | 3 min read

Words by Lucy England, Business Insider

Apple Pay is missing one essential feature that it needs to stop people using other mobile payments apps: person to person transactions.

But it looks like Apple is planning to change that.

The company just filed a new patent that will let people send money to one another directly from their iPhone's Wallet, which has replaced the Passbook app, Patently Apple reports.

First, the user opens their Wallet app, chooses which of the credit cards stored there they want to use to make the payment, and type in the amount they would like to pay. The payment can be authenticated using a fingerprint or the iPhone's passcode. The system would also let the person paying pick the recipient from nearby iPhone users. Then, an encrypted payment "packet" is sent to the person receiving the payment, including the payment amount, verification and a payment "credential," which could represent the sender's credit card details.

Apple Pay is pretty hot on payment security already. When someone makes a purchase with Apple Pay at a store, they don't actually share their card details with the retailer. Instead, a "token" which corresponds with their account details is issued to authorise a payment.

A third party — the user's bank or credit card provider — would complete the transaction, and the payee would get a notification to tell them the payment had gone through successfully.

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