Apple and the banks: the penny has dropped

Apple’s involvement in financial services is rattling US banks. While some remain calm, others see Apple in a powerful position.

Apparently, there is growing concern among banks and financial service providers in the United States that Apple could significantly expand its financial operations in the near future. The reason for this is the recent expansion of Apple Pay in the United States. Above all, it is feared that Apple will enjoy clear advantages in data and sales. After Apple’s efforts to provide financial services were smiled at in some places, the penny has since dropped.

As the Financial Times (FT) reports, several experts from the banking sector see three points as key advantages for Apple. In sales, this includes the option of integrating financial services directly into the operating system. For example, the iPhone already points to the Apple Pay payment function by giving the impression that the installation has not yet been completed after a new device has been set up. As a result, Apple gets more attention for its offers than banks that advertise in traditional ways.

Does Apple fancy banking regulations?

Second, Apple has access to a large amount of user data that can be incorporated into the assessment and granting of credit. Here, too, Apple has other options than many banks. The third advantage is Apple’s size and financial strength. The services division of the US tech company alone puts several banks in the shade in terms of sales.

What speaks against Apple appearing as a bank itself in the future and not looking for partnerships with credit institutions like Goldman Sachs, as has been the case up to now, are the many regulations that are constantly changing. Some industry observers expect that Apple doesn’t want to mess with the laws. And they see behind the commitment of the iPhone manufacturer, above all, the effort to strengthen their own device ecosystem. Apple and its partner Goldman Sachs declined to comment on FT’s request.

Apple Pay was launched nine years ago

Apple’s entry into the financial business came in 2014 when it launched Apple Pay. The use of the payment function grew slowly at first, but it is now possible at banks in many countries and is well received. In 2019, Apple presented its first credit card with Goldman Sachs, the Apple Card, which is only available in the United States to date. With Apple Pay Later, a small loan function, and a call money account (“Savings”), Apple has delivered two new functions for Apple Pay in the past few weeks.


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