The technology giant seems to be following the fintech playbook, as it aims to interrupt the traditional banking space.
Apple has announced its official entry into the fintech arena with the launch of its own credit card, currency exchange services and cash return incentives to attract its more than one billion users from its main banks.
During the launch event, Apple CEO Tim Cook said the company “saw an opportunity to transform another fundamental method of payment. That is the credit card. We believe that Apple is in a unique position to make the most significant change in the credit card experience in 50 years. ”
At this moment, the service offer looks quite elegant and very in line with other ‘virtual’ banks such as Revolution or Monzo, which, respectively, have been gaining ground with consumers in recent years with their own digital banking alternatives.
The Apple card will be issued by Goldman Sachs and MasterCard will provide assistance as a key payment processor. The iPhone can now be used as a wallet and will become the new center of all forms of payment (online or offline).
The banking application also seems to be ready to take advantage of the location and other data of users ‘iPhones to help track and provide insightful information about users’ spending habits.
Of course, there will inevitably be cases in which a physical card will be required, and it seems that Apple’s offer will undoubtedly stand out from the crowd. The card will be manufactured with a luxury compound (titanium) and does not have a card number, expiration date or signature on its super elegant design.
What’s next for Apple?
In recent times, Apple has been struggling with falling revenues for its hardware products. Over the years, we have seen how the prices of the company’s phones soared and innovation stagnated, as a number of smaller and more agile hardware vendors have taken the market share away from the technological giant.
With the signature now under pressure from Wall Street to return to its $ 1 billion valuation, we can see the Silicon Valley giant looking to expand its highly profitable services and now the fintech divisions to follow the competitors in the space offering other services. such as loans, investments, trading, and maybe even cryptocurrencies.
Is Apple becoming the largest bank in the world?
Another route rumored for Apple could be to launch its own native currency in its wallet and banking platform. In terms of active users for its iOS platform, Apple surely competes with the reach of Facebook to obtain the crown of the world’s largest place to interact and do business.
Recently it has been rumored that Facebook is entering the native currency market with its payment system based on Blockchain, which will possibly be released later this year.
In the last 50 years, we have seen little innovation or interruption in conventional banks. Fintech players have seen growth in recent times, but the scale of their user base is still significantly disadvantageous compared to the payment providers they need to support the core functionality of their payment and currency exchange capabilities.
With a player like Apple entering the scene, the company can have the scale to control enough payment points so that one day it says it can handle everything ‘at home’ (potentially in its own Blockchain) faster and cheaper than suppliers of traditional payment. This would really bring a much-needed break for the traditional banking industry as it is today.