Apple will lend you directly, without going through a bank

Apple is becoming more of a bank with the launch of Apple Pay Later. For the first time, the firm will not use a banking partner to offer this financial service.

Apple Pay // Source: CardMapr on Unsplash

Apple is the richest company in the world thanks to its excellent high-margin sales, the dynamism of the App Store and its talent for tax optimization. She has so much money, in fact, that she is now able to lend it directly to her best clients. This is the meaning of the Apple Pay Later function presented at WWDC, which will allow customers to pay for a purchase on credit, in installments, by going into debt with Apple.

This is not the first time that the firm has offered this type of service. In the United States, it offers an Apple Pay bank card, but this time the firm has not partnered with a bank.

Apple Financing LLC takes off

Bloomberg reveals these new details on Apple Pay Later. The Goldman Sachs bank had been chosen for the edition of the Apple Pay credit card and the management of the account with Apple customers. However, we know how much the brand likes to cut out intermediaries and maintain as much independence as possible in the relationship with the customer. For Apple Pay Later, she therefore goes it alone.

The media indicates for this that the subsidiary Apple Financing LLC has received the necessary licenses in the United States to sell credit to its customers. It is this Apple subsidiary that will have to monitor accounts and validate new credit requests with Apple Pay Later. Goldman Sachs still keeps a role, and only one, the final payment of the customer at the store, which allows Apple not to issue a Mastercard bank card, for the moment.

Important questions

This new turning point in Apple’s business inevitably raises important questions. First, he begins to draw the features of a complete bank in the colors of Apple, and one wonders how far the firm could go. With the size and power of Apple in the world, could the firm go so far as to market an alternative to Mastercard and Visa? According to Bloomberg, Apple intends to extend this activity with customer services: interest calculation and comparator, loyalty reward for services or bank fraud analysis.

On the customer side, this still raises questions about privacy, despite Apple’s strong promises on this point. The firm can already know in detail the health information of the user thanks to the Apple Watch and could add the financial information of the person. Above all, a credit application is subject to a health questionnaire. Could Apple go so far as to create a mix of genres by directly questioning what it knows about the customer’s health data before offering them credit?

The last question, perhaps the most obvious, is that of the arrival of the service in France. To maintain its independence, Apple Pay Later asks Apple Financing to comply with the authorities in each region. If Apple retains this strategy, we will have to wait for the subsidiary to obtain its authorizations in France.

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