Apple Cash adds ID verification to help protect users from fraudsters

The news: Apple Cash will require identity verification to send or receive peer-to-peer (P2P) payments that total more than a weekly limit of $500, per CNET.

• This includes transfers sent from a user’s Apple Cash balance or from a credit or debit card in the Apple Wallet.
• To verify their ID, users will need to take a photo of their driver’s license or ID card, answer personal history questions, and provide information like their home address, date of birth, or Social Security number.

Apple Cash previously only required ID verification for features like creating a Family Account.

Why it matters: Updating ID verification can make consumers feel safer and protect them from scams and other P2P fraud, which has become rampant in the industry.

• So far this year, 83% of US adults have been scammed or targeted by fraudsters on payment apps like Venmo, PayPal, and Zelle, per Security.org.
• This is a sharp increase from the 68% who said they were scammed last year and the 48% in 2022.

The bigger picture: While ID verification can help protect users, it also adds friction to the payments process. This goes against Apple’s efforts to make Apple Cash more frictionless for users.

• Tap to Cash is scheduled to launch with iOS 18 this fall. It will function like Apple’s AirDrop, letting users send and receive Apple Cash with nearby iPhone users without giving them any personal details like a phone number or scanning a QR code.
• The rollout will bring the popularity of Tap to Pay—and its ease—to the P2P payments experience.

Our take: Despite payment providers’ neverending push to remove friction from payments, many consumers actually want a little bit of friction. It makes them feel more secure and can prevent them from sending the wrong amount of money or purchasing the wrong thing. It can also curb impulse buying.

Because of this, the friction Apple Cash’s ID verification brings should help boost its adoption rather than hurt it. This can help Apple Cash attract more Apple Wallet users, which will account for 63.9% of all iOS users this year, according to our forecast.