How Apple Pay Cash Stacks Up Against Venmo

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As part of an early release of its updated iOS 11.2 mobile operating system, Apple is rolling out a P2P payments platform, Apple Pay Cash, available to anyone with an iPhone or Apple tablet, Apple Watch.

Apple Pay Cash already has a lot of competition. The person-to-person (P2P) payments market is fairly saturated with other platforms like Venmo, Paypal, Square Cash, Google Wallet and the like. At the moment, Apple’s largest competition in the P2P space is social payment app Venmo, which is owned by yet another competing payments processor, Paypal. Like competitors Venmo and Paypal, Apple Pay Cash is easy to use with one way we communicate most: via text. But unlike its major competitors, Apple is leveraging its user base to provide a P2P service that comes along with ownership, rather than requiring you to download another application.

Venmo uses emojis and a social feed in an attempt to take the “awkward” out of paying or charging your friends money. The tactic seems to work. Venmo’s user base completed $9 billion in transaction last quarter, about 93% more than the same quarter a year earlier. Since September 2016, the app allowed its users to pay via iMessage and Siri, expanded its online payments business, and tested out a physical debit card with some users. The company is also reportedly, like many other P2P processors, exploring instant deposits, too, to the tune of about $0.25 per transfer.

Apple Pay Cash seems to imitate several of Venmo’s features, so the 68% of millennial mobile payment users who say they use Venmo most seemingly won’t have too much incentive to make a switch to Apple Pay Cash. However, a relatively easy setup with Apple Wallet, may appeal to those outside of the millennial demographic who aren’t already attached to Venmo, but need to send mobile payments, too.

What is Apple Pay Cash?

Apple Pay Cash is Apple’s person-to-person money transfer service. Apple users can use Apple Pay Cash to quickly send and receive money to and from friends, acquaintances and family members using Apple’s built-in messaging app iMessage. The service is available in the U.S. on iPhone SE, iPhone 6 and later, Apple Watch, iPad Pro, iPad 5th Generation, iPad Air 2 and iPad mini 3 or later. You can also ask Apple’s intelligent personal assistant, Siri, to pay someone via Apple Pay Cash.

Source: Apple

How does Apple Pay Cash Work?

You can say, “Hey Siri, send $[an amount of money] to [one of your contacts]” to prompt a message asking them which app you want to use to send the funds, including Venmo. You can also send money via iMessage by tapping the app store icon and selecting Apple Pay at the bottom.

The money you send will come from one of two sources in the Apple Wallet application: The digital Apple Pay Cash Card or any linked debit or credit cards in your Apple Wallet. The transaction is free if you pay someone using a debit card. If you use a credit card to pay another person, you’ll be charged a 3% fee. Payments are approved using a finger with Touch ID or a smile with Face ID if you have an iPhone X.

When you get paid, the money you receive is automatically credited to a digital Apple Pay Cash Card that lives in Apple Wallet, for use right away. Unlike Square Cash, you don’t get a physical card to use, but the digital Apple Pay Cash Card, like a gift card, can be used like any other debit or credit card in the Apple Wallet. You also have the option of transferring the funds on your Apple Pay Cash Card to a bank account, but that may take up to three business days.

When not using Apple Pay Cash to pay a roommate your share of the light bill or charge a friend for his share of the a group vacation, you can use the digital Apple Pay Cash Card — or another card in your Apple Pay account — at any of these retailers to pay online or in stores.

How do I get Apple Pay Cash?

To do to gain access to Apple Pay Cash, update your compatible device to iOS 11.2 or watchOS 4.2 and set up the Apple Pay Cash Card in Apple Wallet. Apple Pay Cash is not available on non-Apple devices or for use outside of the United States.

Step 1: Update your Apple device

To update the device, go to Settings, then General, then Software update. An on-screen message will let you know what version of iOS your device is running and prompt you to update if you’re using old software.

Step 2: Set up your Apple Pay Cash card

Once the device is updated, it’s time to set up the Apple Pay Cash card. In Settings, go to Wallet & Apple pay. There you will see the “Add Credit or Debit Card” option or your Apple Pay Cash card. Click on the card to set it up. Hit continue, and agree to the terms and conditions after reading them thoroughly.

Verification

The device may or may not prompt you to verify your identity when setting up the Apple Pay Cash card, but you should if you want to send or receive more than $500 per transaction.

To verify on iPhone, click the small ‘i’ with a circle around it next to the Apple Pay Cash card in the Apple Wallet app and tap Verify Identity. You will be prompted to enter personal information like your name, Social Security number and date of birth. You may also need to answer questions about your personal history or submit an image of a photo ID like a driver’s license for verification.

You can then load the card with funds using other linked debit or credit cards in Apple Wallet. The Apple Pay Cash card requires a minimum $10 deposit. However, users don’t have to load and Apple Pay Cash card with funds before you can use Apple Pay Cash to send and receive funds. They can use Apple Pay Cash with any of their other linked debit or credit cards in Apple Wallet.

When the two steps are complete, you can then begin using Apple Pay Cash.

Source: Apple

How does Apple Pay Cash stack up to Venmo?

Apple’s main competition in the P2P space is Venmo. Here’s a breakdown of how Apple Pay Cash stacks up to the leading P2P payments platform.

Where Apple Pay Cash beats Venmo

No need to download an app

Apple Pay Cash is built into Apple’s iOS operating system, so you don’t have to download another app that could take up precious phone memory drain your battery life. To use Venmo on the go, you need to download and set up the Venmo app, which can be a tedious hurdle for some.

Easily change between payment options

You can’t easily switch between payment options in iMessage using Venmo like you can with Apple Pay Cash. The only way to switch payment option is using the Venmo app and changing payment options requires going to Settings, then Banks and Cards, then setting one card or bank account for use in payments to peers. After going through multiple screens to complete that process, you can then pay with the selected payment source.

With Apple Pay Cash, you can switch payment options in your Apple Wallet right in the iMessage app, in the middle of making a transaction.

Apple Pay Cash automatically gives you an in-app card

The Apple Pay Cash card is an interesting addition to the P2P space, as it allows you to automatically access to the funds you receive via Apple Pay Cash. The digital card lives in Apple Wallet and can be used like a gift card to make purchases in physical stores or online at retailers who use Apple Pay.

Source: Apple

Transfer limits

Apple Pay Cash lets you send more money per transaction and on a weekly basis than Venmo does. Apple lets you send up to $3,000 in a single transaction and $10,000 in a seven-day period. Venmo has a $2,000 transaction limit and a seven-day limit of $2,999.99. Venmo users can send or receive up to $4,999.99 in a seven-day period and may not complete more than 30 transactions in a 24-hour period.

Where Venmo has the edge over Apple Pay Cash

Venmo has a wider reach

Venmo offers its same P2P service online at Venmo.com, where you can log in and do everything you do on the Venmo app on your desktop or laptop. Apple Pay Cash is exclusively offered on Apple’s mobile devices. Exclusivity may or may not be a downfall for Apple Pay Cash, as exclusive offerings like iMessage and FaceTime have long set Apple apart from its competitors. Those who own Apple Macbooks or desktop devices can pay for items online using their Apple Wallet but aren’t be able to set up Apple Pay Cash without access to an iPhone or iPod touch. Android users and those who don’t have a mobile iOS device, can’t use Apple Pay Cash.

Venmo might give you a physical debit card

Venmo reportedly sent some users invitations to test out a physical Venmo card over the summer months in 2017. Users who opt ed in didn’t pay a fee to use the card, which pulls funds from the user’s Venmo balance. There is no confirmation of a future rollout of physical-card invites to all users.

Send money from a bank account

You cannot use Apple Pay Cash to send money directly from a bank account, like you can using Venmo and practically any other existing P2P platform. Apple Pay Cash does allow you to send money using linked debit cards, however. Arguably, sending money using a debit card is the same thing as sending money from a bank account, as the funds generally come from the same place.

Where Apple Pay Cash and Venmo are the same

Ask Siri to send

When you ask Siri to send money to a contact, the AI doesn’t automatically send the funds using Apple Pay Cash, but, instead, asks you to select from the options you have that can perform the task. Apple Pay is an option, but so is Venmo, if you have that downloaded.

Pay in Messages app

Way ahead of Apple, Venmo released its in-app iMessage integration back in September 2016 (also when Venmo released its Siri integration). Now, you can do the same thing with Apple Pay Cash.

B-to-C payments

In addition to paying friends and family, Apple Pay lets you pay businesses using Apple Pay Cash. You could technically already use Apple Pay where available in stores and online, but now you can use the balance accrued from received payments or loaded onto an Apple Pay Cash card in Apple Wallet. Venmo users can also complete online transactions to businesses using Venmo, a feature Venmo debuted October 2017.

Cost

There is no cost difference between Venmo and Apple Pay Cash. Both systems charge no fee to send money using a debit card and charge a 3% fee to send money using a credit card. Venmo also doesn’t charge for sending money from a linked bank account. Apple pay Cash doesn’t offer the option to link a bank account.

The bottom line

If you are a loyal Apple user and a late adopter to person-to-person payment systems, Apple Pay Cash could act as a kind nudge into the P2P payments space. In addition, Apple Pay Cash’s iMessage integration and quick setup process make it easy for the less-tech-savvy among us to start sending and receiving funds electronically. On top of that, having an Apple Pay Cash card already in our Apple Wallet makes it easy to spend any money you receive at vendors that accept Apple Pay, without having to wait a day or two for the money to show up in your bank account.

If you’re already a Venmo user, other than Apple Pay Cash’s automatic addition into your Apple devices with the iOS 11.2 update, there’s far less incentive to switch over to Apple Pay Cash. If you like to make your P2P payments and requests on a desktop or want to send funds directly from your bank account, stick with Venmo.

Aside from those features, Venmo and Apple Pay Cash cost the same and are about as simple to use. 

The post How Apple Pay Cash Stacks Up Against Venmo appeared first on MagnifyMoney.

Are Universal Credit Cards Really More Secure?

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They go by many names: universal cards, smartcards, supercards, all-in-one cards. Whatever you call them, the concept is the same: a single credit-card-sized and styled device that allows you to virtually carry your credit cards — and even gift, rewards and club cards — in one convenient place.

But from a security standpoint, is it safer than just carrying all of those cards around in your wallet? It could all depend on what security measures the all-in-one-provider put in place, experts say.

“Some may argue that … cards behind the universal card are typically stored in the cloud, and any hacker from around the world could possibly access those cards,” Troy Bernard, Director of EMV & emerging payments with CPI Card Group, a Colorado-based provider in payment card production and related services. “Our response is that the all-in-one card provider must protect the stored information by both encrypting it and tokenizing it, rendering that data useless.”

The process of tokenization replaces card numbers with a set of meaningless numbers that couldn’t be used elsewhere.

In addition to protecting the stored data, when a universal card is used to make purchases, the tokenized card information can also be restricted by the environment that it is used in, Bernard explained in an email.

“This is called domain restriction,” Bernard said. For example, a merchant card can be tokenized and domain restricted to only work at their specific stores; anywhere else, the purchase is not authorized.

“Finally, many of these products leverage the mobile phone as a companion to the all-in-one card. The phone can be used to deactivate the universal card if it is lost or stolen, and the geo-location features in the phone can be used to ensure that the proper owner of the card is with the card at time of purchase.”

So the potential safety features are pretty impressive, right? Well, yes and no.

“From the perspective of an issuer, this appears to be risky in that existing compromised cards available on the black market can be uploaded into this device,” Seth Ruden, a senior fraud consultant with Florida-based ACI Worldwide, explained in an email. “With the potential for data from stolen cards uploaded into this device, the potential for abuse is high, so it requires the provider of a universal card to ‘know their customer’ and validate their identities.”

The big concern, he said, is for security professionals, however, because many all-in-one cards are still relying on magnetic stripes, which are becoming obsolete at the point of sale because they are more susceptible to in-store fraud. Known as card skimming, a criminal electronically copies card data and PIN codes entered by consumers, then copies the data on to a counterfeit card.

“Issuers do not want their cards to be used at point of sale with a magnetic stripe anymore, as the stripe is highly susceptible to compromise, where chip-based transactions are not,” Ruden said.

Losing your all-in-one card may be no more painful than losing a traditional credit card if many of the aforementioned security measures are in place.

“If you lose your all-in-one card, you likely still have the physical cards it consolidates in your possession,” Bernard said. “In addition, one only needs to ‘cancel’ the [universal] card and not the many cards that are linked to it.”

Are Universal Cards the Way of the Future?

Many small, and even not-so-small companies have entered the universal card business in the last few years. While companies might be keen to offer the cards, the reality is that consumers have yet to start using them widely, due in part to how quickly mobile payment solutions are spreading.

“I do see universal [cards] to be a way of the future, but not on the magnetic stripe form factor,” Ruden said. “Chip-based transactions are the ‘future present’ so any universal solution will need to integrate this point-of-sale mode, and that’s the specific element that is designed into the chip, to be resistant to being duplicated or counterfeited. Tokenization of the card will be a solution that will have legs … Apple, Android and Samsung are growing payment modes and do provide greater security, offering dynamic tokens that feature security parameters well beyond what exists on the static element of the magnetic stripe.”

Regardless of the payment options you choose — mobile, all-in-one, or good old-fashioned credit cards, you should check your statements regularly for unauthorized charges. If you find any, call your issuer immediately to dispute the fraud and have the card replaced. And, if you ever have reason to believe your personal information was compromised alongside your payment information, keep an eye on your credit. A sudden drop in credit scores, for instance, can be a sign your identity has been stolen. You can monitor your credit by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.

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8 Predictions for 2016: Drones, Mobile Pay & the Internet of Things

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Will 2016 be the year people really start buying things with their phones? The year a hacker finally turns the lights off? Or a self-driving car causes an accident? Maybe, maybe not. Maybe some of these things won’t happen until January 2017 — the 12-month time horizon is pretty arbitrary — but these are the things that are listed in almost every prediction story about the new year.

While it might be silly to talk about 2016 guarantees, New Year’s Eve is always a natural time to think about the future, and the exercise of imagining what troubles we’ll soon confront is certainly worthwhile. So I’m not limiting this year’s predictions to the new calendar. Instead, I’m going to discuss what I think is “coming soon.”

1. Things Vs. People

Everyone is correctly predicting that smart gadgets will soon infiltrate our lives (wired crockpots? Of course!), and few of them will be built to protect privacy or care for security. So our homes will likely be hacked and our privacy may erode. But here’s a remarkable data point from Gartner: The number of devices we need to protect will exceed 200 billion by 2020 — 200 billion! “Wearables, gadgets, sensors and other things on the Internet are creating new connections and exposing new vulnerabilities,” warns McAfee. “Every new product that connects to the Internet faces the full force of today’s threats, and we have a long way to go to keep up with the speed and complexity of attack.”

2. People vs. … Robots?

All that is scary, but the real potential looming problem in the things vs. people conflict is this: the robot workforce. Gartner also predicts that by 2018, more than 3 million workers globally will be supervised by a “robo-boss.” And that same year, nearly half of the fastest-growing companies in the world will have “fewer employees than instances of smart machines.” That’s a polite way of saying you can forget about your job being shipped overseas. Instead, it could be done by a robot soon, unless you can work cheaper than a robot. This conflict is real and arriving much sooner than we expected. If I ran a ride-sharing service, for example, I’d be pushing the limits of self-driving cars as far as I could.

3. Paying by Phone

Adoption rates for mobile payment schemes like Apple Pay have been very slow — but that’s temporary. Over time, consumers will likely see value adds from these services, such as the loyalty benefits we already see from Starbucks. There’s a wide-open door now, as consumers are a bit irritated by delays when using the new chip-enabled credit cards. Mobile pay can be faster in some cases.

4. Your Phone as Your Password

One development that will help mobile pay will be the increased use of mobile devices in two-factor authentication schemes, like the one Amazon just implemented. Users will get a temporary passcode by text or use token-generating software to log in to many financial sites soon. As they get used to whipping out their phones during these transactions, they’ll be more apt to use them to buy things. The phone-as-password development will also hasten the end of old-fashioned passwords. Good riddance.

5. Your Money or Your Data

If you don’t know someone who’s been hit by a ransomware virus, you will soon. Brazen hackers keep finding ways to take control of computers and data and force payment by consumers or organizations to free them. There’s no end in sight for this threat, which means you should keep your security software up to date. However …

6. File-Less Attacks Grow

One of the most alarming developments in the security space has been the growth of cyber attacks that completely bypass computers’ software (and thus, antivirus software). “File-less” attacks involve techniques like injecting malicious code directly into a computer’s memory space. They are much harder to prevent and detect; they are similar to the point-of-sale device memory attacks that have been rampaging through big retailers, stealing millions of credit card account numbers. You should be hearing much more about these soon.

Thanks to increased risk to our personal and payment data, it’s important to monitor your credit for signs of identity theft, You can do so by pulling your credit reports for free each year on AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.

7. Drones Everywhere

As drones continue to come down in price and become easier to operate, our skies will likely be filled with them. Sure, there’s some great potential for drones, which are now a staple in news coverage of big events. But Heaven help us if they start crashing into each other, taking pictures of us in our homes or becoming a fixture in life-casting videos on the Kardashians.

8. The Campaign

Finally, the one thing I can guarantee during 2016 is that noise will dominate signal on social media during the presidential campaign. The Internet is the best tool ever invented for spreading mistruths. Knowing this, you can be part of the solution by simply not forwarding or posting lists of bad things about Donald Trump’s hair or Hillary Clinton’s bathroom breaks. Heck, Americans showed incredible restraint during the release of Star Wars as millions managed to avoid posting spoilers. Let’s show similar restraint during the election, too.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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