An important component of the newly released iOS 10 includes a developer-friendly ecosystem in iMessage, which enables the integration of payment applications like Circle.

Apple executives revealed the new mobile operating system at the company’s big event on September 7 alongside with updated lineups of other products, such as the iPhone 7, iWatch 2 and MacBooks.

The Apple’s development team approved a limited number of applications to be integrated into iMessage. Popular messaging clients such as Whatsapp and Snapchat as well as other alternative apps like emoticon offering Mayo made it to the list, to simplify and enhance the messaging experience on the new iPhone 7.

Another category of tools integrated into iMessage is payment applications like Circle and Square Cash that allow users to transfer, send or receive any amount of money through the same channel used for circulation of messages. For instance, iPhone 7 features iMessage with locally integrated Circle app, which admittedly allows users to send bitcoin payments as easy as they send texts.

Circle and its CEO Jeremy Allaire believe that the added payment processing application reduces friction for consumers. The integration of Circle opens Bitcoin and cryptocurrencies in general to common users and mainstream adoption.

Most customers, beginner bitcoin users in particular, often struggle to find an applications or platform reliable and practical for sending payments across the globe. After the recent Bitfinex hack, users are even more cautious when it comes to selecting a bitcoin application to send payments.

According to the company, Circle locally integrated into iMessage reduces friction for users who will not have to go to the app store and select, download and install a third-party application to be able to send payments.

“There’s a hurdle to have to install a smartphone app so that I can pay my buddy and all the inputting and set up. To do it all within the iMessages app is a lot easier,” said Allaire.

Apple Pay's Emerging Competitor

Although the integration of the bitcoin payment processor allowed the consumer electronics giant to garner interest from the bitcoin industry, Circle will inevitably become a serious competitor to Apple’s built-in payment application Apple Pay.

The entire business model of Apple Pay is heavily reliant on its partnerships with e-commerce and retail companies such as Best Buy, Target and Walmart. The payment application supposedly enables users to transact with substantially lower costs compared to other alternatives such as credit or debit cards.

However, once Circle becomes adopted by a significant portion of the iMessage user base, bitcoin’s low transaction fees will provide Circle with a significant advantage over Apple Pay, which could potentially threaten its market dominance and its market presence in the US.

The reasons for Apple’s integration of a rival payment application into iMessage remain unclear.

Joseph Young