Apple could disrupt banking industry by launching peer-to-peer payments service on mobile devices

After entering the mobile payments world in 2014, Apple is now rumoured to launch a peer-to-peer payments service on mobile devices by partnering with some US banks. The new offering would take on popular payments services like Jack Dorsey's Square and PayPal's Venmo among others.

According to a report by The Wall Street Journal, Apple is in talks with US banks to develop the new payments service that would be launched by as early as 2016. The Cupertino giant has reportedly been granted a US patent for an encrypted peer-to-peer payment system which enables transactions through wireless electronic devices -- likely to be mobile handsets such as iPhones.

Unlike a traditional payments service, the reported mobile peer-to-peer payments service by the iPhone maker is said to offer users a way to send payments from one account to another simply by using mobile devices, instead of using cash or cheques. This would be on the lines of what Venmo is offering many of its young customers. Cash transactions lead in terms of consumers' transactions patterns but services like Venmo and Square have started gaining some focus from the market in the recent past.

Apple has not yet officially revealed any details about the rumoured payments service. However, CEO Tim Cook in his keynote at Dublin's Trinity College hinted at the launch by saying that digital-payments systems like Apple Pay will become so pervasive in the future that "your kids will not know what" cash is.

The statement made by Cook certainly confirms an upgrade to the existing Apple Pay service that the company started rolling out since October 2014, by partnering with Visa, MasterCard and American Express among others. Moreover, this would be an integration of the service with the new peer-to-peer payments service to ultimately disrupt the present banking industry.

The Cook-led company is reported to be in conversations with institutions like JP Morgan, Capital One Financial Corporation, Wells Fargo and US Bancorp to mark the success of the new service. But still, no details are available regarding any deal or negotiation.

Apple is not the only tech company that apparently has plans to spread across the banking industry. Facebook recently started testing its peer-to-peer payments service through Messenger app and Alphabet's Google is also in development to work on the same front.