Apple seeks to free itself from the financial partners to which the manufacturer calls for its services such as Apple Card or the future and still hypothetical Apple Pay Later for ” buy now and pay later ” (several times). According to BloombergApple is developing its own financial infrastructure, which will allow it to take charge of payment management, loan risk, fraud analysis, credit rating verification, and customer service such as handling of disputes.
This effort, dubbed “Breakout” internally, will require an investment over several years. It will concern future financial products, not those that currently exist. But the idea is to cut ties with partners like CoreCard and Goldman Sachs for the Apple Card: CoreCard oversees the process of transferring transaction details to the bank for approval, Goldman Sachs handles the verification of credit rating, payment history, a lot of customer service.
Eventually, Apple hopes to put in place all the pieces of the puzzle that will allow it to take charge of all these services (by the way, the companies that work with the manufacturer on financial products eat a kid stock Exchange…). This activity generates interest and transaction fees, money that Apple would rather put in its pockets. In addition to the fact that Apple likes nothing more than to take its destiny into its own hands, this complex infrastructure to put in place will also facilitate the launch of new products beyond the United States alone.
If the Apple Card is confined to the United States, it is largely because CoreCard and Goldman Sachs are focused on the American market. This also explains why Apple bought the start-up Credit Kudos, which helps lenders assess the risks on loans granted. The technology of this young British shoot could serve as the basis for the Meccano of Breakout.
Apple acquires a British banking start-up that could serve the Apple Card
The first service to benefit from the new infrastructure could be Apple Pay Later, at least the part that will involve paying for a large purchase in four instalments. For a purchase to be repaid over the longer term via several monthly payments, Goldman Sachs would take over. The subscription to the iPhone could also be part of these financial services relying on “Breakout”.
It is also rumored that Apple could dig into its enormous war chest to become the lender for the least risky new services from a financial point of view; in other words, those whose amounts are the lowest and which concern the most solvent customers.
To determine the solvency of a user, the manufacturer would use not only traditional credit organizations (Equifax, TransUnion), but also the history of Apple purchases! A customer who would pay for his subscriptions, his in-app purchases and his ruby gear on the nail would benefit from a better credit rating…