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Apple just announced its own Venmo competitor built into iMessage

Apple Pay now has its own Messages app.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Apple announced on Monday that it is launching a money-transfer service that could challenge Venmo and other competitors, letting iPhone and iPad users send money digitally to each other via a text.

The new feature will appear automatically inside Apple Messages, the company’s messaging product, when Apple launches the new version of its mobile operating system, iOS 11, this fall, a spokesperson said.

Apple also announced its own digital debit card — called Apple Pay Cash — that lets people take the money they receive via the new money-transfer service and use it to make Apple Pay purchases online or in physical stores that accept tap-and-pay transactions.

Recode first reported in April that Apple was working on both products. They will only be available in the U.S. — at least for now.

The new Apple money-transfer service will go up against competing offerings from PayPal, PayPal-owned Venmo, Square Cash and popular bank services like Chase QuickPay. But unlike many competitors, Apple’s cash-sending feature is limited to users of iPhones, iPads and Apple Watches.

As I previously wrote, “These services have typically been money losers for the new entrants in the space, but are seen as the gateway to the next generation of payment and personal finance services that could upend traditional consumer banking relationships. They are used for everything from splitting dinner bills to paying rent.”

So does Apple want to be a bank? Not now, but maybe someday.

For now, the new Apple Pay Cash card could have a more direct impact on a current Apple business: Apple Pay. Industry insiders believe the virtual debit card will be a way to introduce Apple Pay to new users, perhaps to younger consumers who don’t already have their own traditional credit or debit cards.

That, in turn, could boost usage of the Apple Pay service, which has been underwhelming in the nearly three years since it launched, bank sources previously told Recode.

To send money using Apple’s money-transfer service when it launches in the fall, people will have to add a debit or credit card as a funding source to Apple’s Wallet app. Money-transfer services backed by a debit card will be free for users, while those backed by a credit card will be hit with a 3 percent fee — the same as competitors.

Apple is partnering with prepaid payment card company Green Dot on the Apple Pay Cash card.

“Today, Apple announced that it will bring its users the ability to make and receive person to person payments quickly, easily and securely with Apple Pay this fall,” a Green Dot spokesperson told Recode in a written statement. “When users get paid, they can use the money instantly to send to someone or make purchases using Apple Pay in stores, apps, and on the web, or transfer to their bank account. Green Dot Corporation and Green Dot Bank are working with Apple as the program manager and regulated bank partner to help facilitate these new capabilities. Green Dot expects an immaterial impact to its previously provided financial guidance for 2017.”

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