From Credit Cards, Savings Accounts To Lending: How Apple Is Quietly Becoming More And More Like A Bank

We all know that iPhone maker Apple Inc. has been a tech giant for several decades. It¡¯s also the world¡¯s first company to hit the mammoth $3 trillion market capitalization. Every year, the tech giant gives the world new products and technology. But that¡¯s nothing new, right?

What if we told you that Apple has quietly been becoming more and more like a bank as well? Yes, you read that right. Scratching your head to know how?

Let us explain how Apple has been stepping into the financial services space through savings accounts, cards and even lending, and becoming no less than a bank in itself.

AP

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How Apple Is Becoming A Bank In Itself

1. Apple Credit Card

In August 2019, Apple had launched its credit card, the Apple Card, in the US. It was a new kind of credit card created by Apple and designed to help customers lead healthier financial lives. Goldman Sachs had become Apple¡¯s partner for the card.

Goldman Sachs is the issuer of the Apple card and is responsible for underwriting, customer service, the underlying platform and all matters related to regulatory compliance. With features including no fees, daily cash back and seamless integration into Apple¡¯s mobile devices, Apple Card introduced a new level of privacy, security and transparency to credit cards, allowing consumers to quickly and easily analyze their spending patterns and calculate how much they could save in interest charges by paying off different portions of their balances.

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2.Apple Cash & Apple Pay

Launched in 2017, Apple Cash is a digital card in Wallet that lets you send and receive money in Messages or Wallet. Apple Cash is built right into iPhone, making it an easy way to send and receive money. And because it¡¯s a digital card that lives in Wallet, your Apple Cash can be spent in stores, online, and in apps with Apple Pay.

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Apple Pay was launched way back in 2013 in the US. Apple Pay is a mobile payment service by Apple, that allows users to make payments in person, in iOS apps, and on the web. It is supported on these Apple devices: iPhone, Apple Watch, iPad, and Mac.

As per appleinsider.com, Apple Pay is now available in over 50 countries and territories globally. Many major retailers accept it, and most major point-of-sale retail terminals can process tap-to-pay transactions.

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3.Apple Savings Account

In October 2022, Apple had announced a new savings account for Apple Card that will allow users to save their Daily Cash and grow their rewards in a high-yield Savings account from Goldman Sachs. In the coming months, Apple Card users will be able to open the new high-yield Savings account and have their Daily Cash automatically deposited into it ¡ª with no fees, no minimum deposits, and no minimum balance requirements. Soon, users can spend, send, and save Daily Cash directly from Wallet.

As per Apple, Apple Card users will be able to easily set up and manage Savings directly in their Apple Card Wallet. Once users set up their Savings account, all future Daily Cash received will be automatically deposited into it, or they can choose to continue to have it added to an Apple Cash card in Wallet. Users can change their Daily Cash destination at any time.

As Apple can¡¯t do much without the cooperation of banks like Goldman, the two companies had unveiled plans for the high-yield savings account where Apple Card customers would be able to deposit funds and earn interest on their cash-back rewards, as per The Wall Street Journal report

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4.Lending-Buy Now Pay Later

In July 2021, as per Bloomberg, Apple had begun working on a new service that will let consumers pay for any Apple Pay purchase in instalments over time, rivalling the ¡°buy now, pay later¡± offerings popularized by services from Affirm Holdings and PayPal Holdings.

The service, known internally as Apple Pay Later will use Goldman Sachs Group. as the lender for the loans needed for the instalment offerings. But a wholly owned subsidiary of Apple will check user credit and extend short-term loans to users for Apple Pay Later, the tech giant said, as per a CNBC report in June 2022.

Apple partnered with Mastercard, which interacts with the vendors and offers a white label BNPL product called Installments, which Apple is using. Apple Card issuer Goldman Sachs also is involved as the technical issuer of the loans and is the official BIN sponsor, the company said. But Apple is reportedly not using Goldman¡¯s credit decisions or its balance sheet for issuing the loans for buy now pay later.

In June 2022 itself, as per Bloomberg, Apple unveiled a flurry of new software features and services at its Worldwide Developers Conference, including an updated iPhone lock screen, multitasking features for the iPad and a pay-later service that vaults it further into finance.

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