Apple must by now be close to launching its promised Apple Pay Cash service, and when it does, it will be taking a big step toward building its own kind of multinational cryptocurrency.
Money, money, money
While it’s only funny in a rich man’s world, the chasm between money as a tangible asset and cash as an item on a digital balance sheet isn’t hard to see.
From the trillions spent by future generations to bail out the banking system to the eye-watering cost of property loans, so much of this cash is invented by itself in a closed-loop system and then traded by consent.
The fintech industry is making billions by trading digital assets, and the need to protect and internationalize those numbers is driving a growing number of traditional financial service providers to move toward adopting blockchain-based accounting systems.
I imagine there may also be investment firms that have designs on using cryptocurrencies to run rings round government tax authorities, particularly as so many voters now seem to think the very rich should shoulder more of the tax burden.
The pressing need to enable more fluid cash flows across borders to service increasingly internationalized industries is also driving demand for new digital payment systems. At the same time, many consumers are learning to appreciate the added security of mobile payment systems.
Elsewhere, entrepreneurs are working to extend such systems to some of the 2 billion people worldwide that the U.N. recognizes as being effectively stateless, without birth records or bank accounts. In the future, it may be that virtual currency becomes the first way many at the bottom of the global wealth chain get to experience the convenience of something like cash.
Money is history. History shows continuous evolution in the means of exchange, from gold to banknotes, credit cards to Bitcoin, Ethereum and (in Apple’s case) Apple Pay.
Apple’s cash machine
The Apple cash machine is a popular topic for debate. In part, this debate underlines the need to develop suitable taxation systems for a digital age, but given many with the power to develop these systems probably profit from the current one, I don’t expect rapid change.
Apple Pay is Apple’s foot in the cryptocurrency water.
There is an irony in that just like any cryptocurrency, it has a root in traditional financial payment systems. Just as you link Apple Pay up to your credit/payment cards, you must link most cryptocurrency services to the same.
Apple Pay Cash has the potential to change that, as money you receive (via Apple Messages) from others is added to your Apple Pay Cash card that will live in your Wallet app.
While you can transfer this cash to your bank account if you want, you will also be able to use it directly to make purchases using Apple Pay in stores, in apps, on the web, or anywhere else that may eventually support the payment system.
Apple Pay Cash
That’s important because it means Apple has taken a fairly large step toward creating its own take on cryptocurrency.
This is real money, after all, that exists only in Apple space until you turn it into something else — a purchase, a service or "real" money in your account. You’ll also be able to share it with other people.
While the service will be U.S.-only on launch, it will extend, and it will be interesting to see how Apple supports person-to-person payments across borders. To enable the service, Apple is working with Green Dot Bank.
The partners will need to unravel complex questions, such as: If someone in Ireland chooses to use Apple Pay Cash to send money earned in Ireland to someone who works at an iPhone factory in China, in what location is the “value of that exchange created”?
I’m not a tax lawyer — I have other demons to keep me up at night — but questions around such accountability like these will become increasingly important as the financial system becomes increasingly virtual, international and semi-stateless.
Momentum favors change
It seems foolish to underestimate the importance of Apple Pay to the company’s future service provision plans.
While I continue to read some reports that dismiss Apple Pay, they don’t seem to reflect a reality in which the service’s active user base doubled in the last 12 months and transactions climbed 330 percent.
As I see it, be it consciously or unconsciously, Apple is creating a global platform-based payment ecosystem that could evolve as an international virtual currency iPhone, iPad and Mac owners may use to purchase and trade products, services and more.
Given the wider momentum around cryptocurrency, it seems more foolish to ignore that potential than to embrace it.
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