How Do You Send Money?

Besides writing a check, how else can you send money to someone?

It’s 2017 and most people I know still write checks to give money to someone else. You would think by now technology has solved this problem of carrying a checkbook, writing out specific information, and bringing that to the bank. This ancient technique has finally been updates, for the most part.

There are numerous ways to send money to another individual or business, whether is to pay a bill or a gift, a lot of services exist for this sole purpose. Venmo, PayPal, Square, and PopMoney are three popular services, but it seems most banks offer their own version. These money sharing services often charge a fee when using a credit card, but most of the time there is no charge to use debit from your checking account. The issue with using an app to send money is that the funds live in the app and the recipient has to withdraw or transfer the money to use it. In rare instances, someone may keep the funds in the app and use it elsewhere, this is common when using PayPal. Think of someone you know that you’ve written a check to in the past. Odds are that they wouldn’t know what to do if you send them money via Venmo.

Enter Apple’s solution to this problem: Apple Pay. Ever since Apple debuted Apple Pay in 2014, I’ve been wondering how I can use this to pay another individual. While not as simple as holding your iPhone up to an NFC reader, Apple proves they have taken the time to think this through. Basically, you can send someone money through your iPhone to another person who has also has an Phone through the iMessages app. The way they do this is by giving you an Apple Pay gift card that you can load money on to send to other people. The great thing about this gift card is you can use the loaded/transferred funds anywhere that accepts Apple Pay, right from your iPhone. You can also transfer this money to your bank account, which should be free to do. If you send money to another person through Apple Pay by using a credit card, you’ll be charged a fee of about 3% of your transfer amount. This is to pay the credit card fees, so Apple isn’t making any money of this transaction. This transfer fee is standard throughout all the popular money sending services, but differs in actual percentage.

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A lot of retailers are moving to this “gift card” scenario where you load money on to a card and use that to pay, usually through a smartphone app. Starbucks is the biggest one I’ve used and they entice you to use it with rewards resulting in free items. The kicker with Starbucks is you can reload your card using Apple Pay, which makes this new system work.

Apple Pay person-to-person will be launching later this fall. This new money transfer system will take a very long time to catch on, if ever. The older generations, who actually use smartphones, will probably never get on this program. Don’t expect that $10 birthday check from your grandparents to go away any time soon.

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