(Bloomberg) — Apple Inc. wants to make it easier to settle a tab with friends using your iPhone.

Apple has been speaking with banks about introducing a new peer-to-peer payments feature, according to a person familiar with the talks. The service would be incorporated into Apple Pay, the company’s mobile system for making purchases at brick- and-mortar stores with an iPhone and could be introduced as soon as next year, said the person, who asked not to be identified because the talks are private.

The feature would ramp up competition among companies trying to make it easier for people to pay other individuals using their smartphones. While customers still haven’t shown much desire to swap out their debit cards for mobile apps, companies including Square Inc. and PayPal Holdings Inc.’s Venmo are focusing on the peer-to-peer market. Financial institutions including JPMorgan Chase & Co. and Wells Fargo & Co. also are exploring the area.

Peer-to-peer payments allow a person to send money from a bank account to someone else with a few taps on a smartphone. It’s popular among young people who don’t carry around as much cash as previous generations — be it for settling dinner tabs or repaying a friend. The companies expect that as more people test peer-to-peer features, they’ll become more open to using their phones to pay for retail purchases at stores — a much more lucrative business.

Potential Customers


 With more than 230 million iPhones sold last year, Apple would have the potential to make the technology more mainstream. The Cupertino, California-based company introduced its mobile-payments system last year, which allows device holders to buy items by tapping a phone or watch on terminals near cash registers.

Apple this year released its Wallet feature, which combines payments with loyalty cards and tickets for events and air travel. The product is part of the company’s strategy of adding services to encourage people to buy new iPhones every few years. Thus far, however, Apple Pay hasn’t gained widespread adoption, accounting for 1 percent of retail purchases in the U.S. this year, according to researcher Aite Group.

Apple declined to comment on its plans. The peer-to-peer discussions were reported earlier by the Wall Street Journal.

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