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31 March 2022
Apple’s financial ambitions grow
Brand extensionsDigital payments
Apple is looking to build its own financial capabilities, having previously relied on partners for processing, as the iPhone maker targets a bigger role for its financial services in an evolving offer.
Why it matters
The general trend within Apple is toward services, with phones and computers a ramp into the ecosystem, the recently reported idea of hardware as a subscription points this way.
But financial services, while highly regulated and complex, are a strong opportunity for Apple at a time when two thirds of adults prefer digital platforms for their banking, and the question to the consumer changes: who offers the finest digital experience? Apple’s brand is huge and trusted – it’s a big deal.
What’s going on
First reported by Bloomberg, the news essentially focuses on the company seeking independence through the codename ‘Project Breakout’, as the firm works toward developing payment processing and other financial infrastructure. Not only that, it’s exploring credit checks, fraud analysis, and lending assessments.
Last week, the company acquired a UK lending decision firm, Credit Kudos. This not only suggests deeper financial ambitions but a desire to expand beyond the US, the only market in which its financial products (other than Apple Pay) are active.
Likely, the first iteration of this new set of products will be a buy now pay later service, which could also help smooth the buying of expensive Apple hardware. These kinds of services are already popular with 15% of adults around the world having made a BNPL purchase in the last three months.
The company has offered financial services with Goldman Sachs among others since 2018. But this is, apparently, a future-facing development that builds on an already formidable slate of finance products: a credit card, a wallet, payment acceptance through iPhone for sellers.