Apple Pay Between Friends

Going out to restaurants with millennial friends can bet the worst.  Everyone wants to pay separately, but nobody has cash.

Has this happened to you before?

#1 The Bill Can’t Be Split:

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The bill comes, and everyone is frantically pulling out their credit cards and trying to calculate their portion of the bill?  The waiter comes, and he announces that he cannot split the bill due to some probably made-up reason, so one person ends up paying for all of it?

#2 The Split even:

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You join your friends for dinner, you decide to be thrifty and get an appetizer, meanwhile someone else orders a large meal with alcohol.  The check comes, and the person that seemed to order the most thing announces that the bill will be split evenly between everyone at the table.

#3 All Cash Deficit:

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The check comes and everyone throws down cash.   The waiter comes and announces that there is still a deficit. You look around at the 8 people around the table.  Who was short cash?  Did someone not tip?  So one person ends up giving the tip for the entire table.

#4 The Frantic Calculation

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Everyone grabs for the bill and tries to make their own estimate on how much their meal was along with tax and tip.  They write the number on the back of the receipt along with their name in hopes that the waiter will run each card separately.

#5 Some Cash / One Credit Card

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A couple of friends throw down cash, and you’re the only one with a credit card.   The waiter takes your card and processes the full amount and you’re left with a ton of cash in your pocket.  Great for people that love cash.  Terrible for people on a budget trying to track their purchases on mint.com

Silicon Valley is working on a solution for this.  Venmo, a subsidiary of PayPal, seems to be the most popular choice.  Google now allows you to send money through gMail,  Facebook lets you send money through messenger, and Square is in the game now with their $ app.

Apple would also like to get in on the action.  Recently, the world’s most valuable technology company has been in talks with banks about using Apple Pay to send money to friends.  If apple wants a chance at competing, it will need to make the service free and compatible with debit cards.

As exciting as it is to be in the person-to-person payment business, the services are not cheap and it is possible that Apple would lose money on each transaction.  It is said that just validating a new account with a debit card would cost apple about 3 bucks a person and possibly 25 centers per transaction.

So why then would Apple want to get into this business if it runs a deficit?

Answer: To increase adoption of Apply Pay.  Apple wants people to use their phones/watches to make transactions not only with friends, but in the retail space as well.

This Black Friday 2.7 percent of sales were from Apple Pay.  There is a lot of room to grow.

Venmo processed a whopping 2.1 billion dollars in transactions last quarter alone.  This could be from splitting the bills at restaurants, paying roommates for rent, or splitting movie tickets.

There is no question that we are heading towards a cashless society.  Who will be in charge of the transactions when it shifts over?

How do you use venmo?  What is your experience with Apple Pay.  Let me know in the comments.

 

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