Market Data 
In July 1999, Wired magazine published an article that presented a view of the future for payments. Focusing on a soon-to-be-released product from startup Coinfinity, it explained how the service would allow customers to “beam” money between handheld devices such as Palm Pilots, enabling in-person P2P transfers. The product had been demonstrated in outlandish fashion the week before, when VC firm Nokia Ventures used it to beam their $3m investment in the company to CEO Peter Thiel. The product in question? PayPal.
“All these devices will become one day just like your wallet,” Thiel told Wired at the time. “Every one of your friends will become like a virtual, miniature ATM.”
The in-person P2P payments concept didn’t quite prove to be the USP PayPal was looking for, but it did serve as a starting point for what is now one of the most important payment companies in the world. However, earlier this month it returned in new packaging, in the form of Apple Tap to Cash.
Apple Tap to Cash adds P2P NFC payments
Unveiled as part of a slate of announcements at Apple’s yearly conference WWDC24, Apple Tap to Cash is a near-field communications (NFC) system that enables iPhone owners to make in-person payments to each other by assigning an agreed amount to transfer and then bringing together their handsets.
“Continuing on our journey to replace your physical wallet, we’re introducing Tap to Cash, a quick and private way to exchange Apple Cash without sharing phone numbers or email addresses,” said Craig Federighi, SVP, Software Engineering at Apple, during the keynote announcement. “With Tap to Cash you can pay someone back for dinner just by holding your phones together.”
The solution is no doubt dramatically more smooth than that on offer from Thiel and his colleagues a quarter of a century ago, but ironically it is also more restricted. While Coinfinity intended for the PayPal software to be beamed along with the payment, envisioning a device-neutral approach to the service, Tap to Cash not only requires both sender and recipient to have an iPhone, but also to have Apple Cash, a virtual card and wallet that sits within Apple Pay and is only available to US customers.
For many players, this would simply be a small but fun feature upgrade that was only of interest to those already using the service, but with Apple’s scale and reach – not to mention the eye-catching graphics that went along with the announcement – it warranted international media coverage.
P2P payments innovation?
The service is framed as a P2P payments solution for both friends and strangers alike, with Apple giving the examples of paying friends back for a shared meal or making a one-off payment at a garage sale. Here, it frames the benefit as not having to share phone numbers or another personal identifier, which differentiates it from other P2P payments solutions such as CashApp or – indeed – PayPal.
On the other hand, it naturally only works for in-person transactions, which significantly reduces its utility in a world where a growing slice of all transactions occur in the digital world.
Which raises the question: is Tap to Cash a representation of something genuinely innovative or just a fun feature with some niche benefits? Genuinely impactful payments features generally have imitators, and it is notable that as yet no other major P2P payments service has a comparable NFC-based solution as yet. This may ultimately change as the functionality develops – Visa, for example, announced Tap to P2P, a tap-based P2P payment solution, at its Payments Forum in May.
However, where there is perhaps greater potential for NFC-based payments is on the C2B side of the market, particularly when it comes to small and micro businesses, such as the garage sale seller mentioned above.
The same NFC technology powering Tap to Cash has already enabled Tap to Pay solutions rolled out by existing point of sale players such as SumUp. Here, alongside its hardware, the company offers an app-based Tap to Pay service for both iOS and Android, which enables individuals to accept payments using their own personal handsets.
Such services are payment-type agnostic, supporting debit and credit cards alongside digital wallets such as Apple Pay and Google Pay, and crucially also support cross-border payments.
Meanwhile, for P2P payments, much of the innovation remains in the digital realm, because outside of transactions where you don’t know the seller, there are few situations where sending a payment is easier in person at a specific time than it is at the convenience of the sender.
