The go-to app
With the launch of the new iOS 10 many services are now becoming available that weren’t available before. A go-to app for global peer-to-peer payments called Circle is now available on iMessage. This app allows iOS 10 users the ability to send U.S. dollars, euros, pound sterling and Bitcoin to anyone via Apple’s texting service.
The iMessage version of Circle was released last week and is rapidly becoming one of the most popular app for Apple. It processes more than 200,000 iMessage a second.
The circle chief executive, Jeremy Allaire stated that the reason for the launch of Circle on iMessage was to “Make money work the way the internet works”. He stated this whilst noting that while people talk about “cross-border” payments, no one would describe an email that way, therefore, the company decided to introduce this service in a unique way.
The Circle Launch
Circle for iMessage launches with iOS 10, which has been available for download since Tuesday 13th September, ahead of the iPhone 7 launch on the 16th.
The circle is available on iMessage as Apple announced that they were opening up iMessage in iOS 10 to third party developers which enabled circle to create a social payment platform.
Social payments have already taken off in China via the WeChat app. This social payment has been enabledby Circle. Circle launched their service in the United Kingdom earlier this year. They plan to roll out to remaining European countries by the end of this year.
How it works
To use the service, an account holder must link their debit card. If both the sender and receiver have iOS 10, the receiver will be able to cash out their payment to their bank account or a Bitcoin wallet. Recipients on Android or iOS 9 will be able to withdraw the cash following a url. It is noteworthy, to understand that recipients whose local currency is not USD, GBP or euro, they will receive Bitcoins which they can then exchange for local currency.
It is important to understand why such service is available at no cost. The reason why Circle charges nothing to send money, is because Circle is one of the several companies who use the Bitcoin network for their efficiency as well as their low-cost. Circle bypass using the traditional banking system. Additionally, another reason why the bitcoin network is used is because it allows a smaller amount of the foreign exchange spread. This foreign exchange spread is at 0.25% as opposed to 3-4% for bank transfers and roughly 1-2% for newer challengers such as TransferWise and Xoom. Although circle does not plan to charge for this service, they do hope that someday they can offer other products such as P2P loans on which the company could generate revenue.
Competitors in the Market
Square Cash which is another P2P payments provider that is launching soon within iMessage. However, the only difference is that Circle can transfer money internationally, while Square Cash is available only domestically. The preference for Circle is higher due to money being sent across borders. The company has also stated that they are exploring additional features in Circle for the use on iMessage; these include and are not limited to group payments or creating a Circle account within the iMessage app.