As part of iOS 11, Apple announced that users will now be able to send money to their friends via iMessage, and spend the balance via a virtual Apple Pay card.
The feature will be built into iMessage as an app, and essentially lets you send and request money with your contacts in one tap. The integration will also be able to do things like recognize when someone says “you owe me $10” and automatically prompt you to send them a payment.
Of course, sending money via iMessage isn’t new — companies like Square and Venmo already have iMessage apps that let you send payments via their platform. But owning the entire ecosystem is always what gives Apple the upper hand, and this time is no different.
Apple is integrating this peer-to-peer payments service with Apple Pay, which is what will make it a killer feature and eventually overtake Venmo and Square Cash payments. After someone sends you money, the balance lives on an Apple Pay virtual card stored in your Wallet app. While you can of course cash this money out to your bank account, you also can use the virtual card to pay anywhere Apple Pay is accepted, both in-store and online, without waiting a day for it to transfer to your bank account.
Essentially Apple is issuing every iOS user a virtual card that will hold a balance they can spend anywhere they want. It’s a brilliant move for Apple, since they (and any payments company) makes much more money when users hold and spend a balance instead of immediately cashing it out to their bank account.