At the WWDC 2022, Apple announced its Apple Pay Later. Before diving into the mechanisms of its buy now, pay later service, let’s have a quick recap of the recent expansion journey of Apple in financial services.
A Brief History of Apple in Financial Services
BigTech companies are highways in the world of technology. To picture the scale, think about Libra, the cryptocurrency that Facebook promoted. Libra was able to reach over 3 billion people in the world overnight. With a single press release, Facebook became more important in financial services than Fintech was in the last ten years.
BigTech organisations, such as Google, Amazon or Apple, have an edge when it comes to finance. Because unlike FinTech, they have the capability to reach billions of users. That’s mostly because they have the technological infrastructure and financial resources, which allow them to provide their services faster and at a lower cost.
So what about Apple? Let’s have a quick recap of the recent expansion journey of the world’s leading BigTech companies.
Apple launched its Apple Pay service in 2014 and in the next four years, it has surpassed 1 billion transactions. In 2019, that number increased 10-fold. Apple has also acquired a number of companies in the last few years, namely: Vilynx, Spaces, Mobeewave, Inductiv and Voysis. Its last acquisition in March was Credit Kudos, for a price of $150 million, which indicated that Apple is getting into Open Banking.
Apple has also made a number of partnerships. In 2019, it partnered with Goldman Sachs to to launch Apple card in the US. In 2020, together with Visa and Zip, they released the ‘Tap and Zip’ feature. Finally, in August 2021, Apple launched the BNPL service, together with Affirm Paybright, for Apple transactions in Canada.
This fall, Apple will release their Apple Pay Later technology in the US. Having over 500 million users of Apple Pay, introducing the Apple Pay Later service is a continuation of their financial expansion.
Apple Pay Later is in its essence a “buy now, pay later” system. The main objective of this service is to allow customers to buy a product and have its cost split into smaller instalments with no interest rate.
But there is always a cost associated with the risk of transaction and the price of money. So who pays for that? How will Apple utilise this technology?
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