Apple Cash vs Apple Pay: Key Differences Explained

What is Apple Pay?

Apple Pay is a mobile payment service from Apple, allowing users to make purchases in stores, online, or in apps using their Apple devices including iPhone, iPad, Apple Watch, or Mac. 

Since its introduction in October 2014, Apple Pay has replaced physical credit and debit cards by letting users store their card digitally on their Apple Wallet. With a few simple steps installing your cards into Apple Wallet and Apple Pay, you can make quick and secure payments using near-field communication (NFC) technology in stores that accept contactless payments or online where Apple Pay is accepted.

Simply put, Apple Pay functions as a digital wallet that you can get access to via your mobile devices, storing your bank cards, loyalty cards, boarding passes and tickets in one place.

Apple Pay is secured by multiple layers of protection, including Face ID, encryption, and tokenization, ensuring the safety of users' information. This makes it widely regarded as a highly secure payment method.

You may be interested: Can you add PayPal to Apple Pay?

What is Apple Cash?

Apple Cash, previously known as Apple Pay Cash, is a peer-to-peer payment system, allowing users to transfer money from one to another via iMessage. Imagine it as PayPal or Venmo, but seamlessly integrated into the iOS ecosystem. When a user receives a payment, the funds are instantly deposited into their Apple Cash card, making them available for immediate use at any merchant that accepts Apple Pay.

Apple Cash can also be used to make purchases wherever Apple Pay is accepted, or the funds can be transferred to your bank account. The Apple Cash card is a virtual card, not a physical one, and works like a prepaid debit card, allowing users to spend the balance they've accumulated through peer-to-peer payments or transfers.

Key Differences Between Apple Cash vs Apple Pay

There are several differences that users should consider before choosing between Apple Pay or Apple Cash, regarding their functions, integration, and international usage.

Functionality

On the one hand, Apple Pay is used mainly for making payments to merchants. Whether it is an online shopping store or a physical one, as long as it uses NFC for contactless payments, Apple Pay is accepted.

 

On the other hand, Apple Cash is designed for peer-to-peer transactions, making it easy to send and receive money between individuals. It also acts as a digital wallet, allowing users to hold a balance of funds, which can be used for purchases or transferred to an individual’s bank account.

Card integration

For Apple Pay, you can store your bank-issued credit or debit cards in Apple Wallet. This digital wallet allows you to make secure payments using those cards. The system is compatible with a wide range of banks and financial institutions, making it a versatile tool for daily transactions at merchants that accept Apple Pay. 

For Apple Cash, you must set up a virtual Apple Cash card that holds the balance of the funds you would like to spend on transfer. While Apple Pay is directly linked to your bank accounts, Apple Cash is designed specifically for peer-to-peer transfer, allowing you to manage your personal funds within Apple Wallet and send money from your Apple Cash balance to your bank account. Apple Cash can also be used at merchants that accept Apple Pay.

International usage

In terms of global coverage, Apple Pay is designed for international use which enables users to make payments in numerous countries, as long as their bank card supports the Apple Pay service. This kind of global accessibility is what makes Apple Pay to top solution for travelers and those who frequently shop online from international merchants.

In contrast, Apple Cash is available exclusively to users in the U.S. and primarily facilitates domestic peer-to-peer transfers. While Apple Cash is convenient for local transactions, its absence of international functionality makes it less versatile compared to Apple Pay.

Fees with Apple Cash vs Apple Pay

For Apple Pay, it does not charge any fees for making purchases, as it uses your existing credit or debit cards to process payments. The potential fees include fees charged by your bank or card issuer, these can be:

• Foreign transaction fees when used internationally

• Transaction Fees

• Cash Withdrawal Fees

Apple Cash is also free for standard transactions, such as sending or receiving money through iMessage. However, using a credit card to send money incurs a 3% transaction fee. Transfers from your Apple Cash balance to your bank are free, but instant transfers do involve a small fee.

If you choose the free option, the transaction can take 1 to 3 business days to process. For instant transfer, the fee is 1% of the transfer amount, with a minimum fee of $0.25.

Apple Cash vs Apple Pay: What should you choose?

When choosing between Apple Cash and Apple Pay, your decision should be based on your specific needs. If you want a seamless way to make payments at stores, online, or within apps using your iPhone, Apple Watch, or other Apple devices, Apple Pay is the best choice.

But if you often send or receive money from friends and family, Apple Cash is the more suitable option. It streamlines peer-to-peer payments and offers a balance that can be used for purchases or transferred to your bank account.

In conclusion, while Apple Cash vs Apple Pay are both Apple’s mobile payment solutions, they serve different purposes and offer unique advantages. By understanding the differences between the two, you can maximize your use of both services for a smoother, more efficient payment experience.