Apple working on first-party financial services under codename 'Breakout'
Apple is currently developing new technology and infrastructure to bring a wide range of financial services for consumers in-house, reducing its reliance on outside partners.
Apple Pay
The multiyear plan is said to include payment processing, risk assessment, fraud analysis, credit checks, and additional customer service functions. Part of the project has been dubbed by the internal codename "Breakout."
Currently, the project is focused on future Apple financial projects and not current ones. Apple relies on third-party financial companies like Goldman Sachs for services related to Apple Card and its own financing programs.
News of Apple's alleged project sent shares of the iPhone maker's partners -- including CoreCard Corp. and Green Dot Corp. -- down more than 8% in intraday trading on Wednesday.
The project would propel Apple deeper into the financial services world, building on a lineup that already includes the Apple Card, peer-to-peer Apple Pay payments, and the Wallet app.
While the move could reduce Apple's reliance on third-party partners, it could also help the company expand into other countries. Apple Pay, for example, is available in 70 countries and regions worldwide. Apple Card, on the other hand, is only available in the U.S.
Apple is also reported to be working on related projects, including a hardware subscription service that would allow users to own iPhones with monthly payment plans. Analysts believe that the company could stick with third-party financial partners at first to offset any potential risks, however.
The company is also said to be developing a new "buy now, pay later" platform in partnership with companies like Goldman Sachs and Affirm subsidiary PayBright. Apple launched the Affirm program in Canada back in 2021.
One of the first parts of "Project Breakout" could be a first-party credit card processing tool that could replace its use of CoreCard. Bloomberg Wednesday's report claims that Apple could first rely on its first-party financial services for the rumored "buy now, pay later" program.
Read on AppleInsider
Apple Pay
The multiyear plan is said to include payment processing, risk assessment, fraud analysis, credit checks, and additional customer service functions. Part of the project has been dubbed by the internal codename "Breakout."
Currently, the project is focused on future Apple financial projects and not current ones. Apple relies on third-party financial companies like Goldman Sachs for services related to Apple Card and its own financing programs.
News of Apple's alleged project sent shares of the iPhone maker's partners -- including CoreCard Corp. and Green Dot Corp. -- down more than 8% in intraday trading on Wednesday.
The project would propel Apple deeper into the financial services world, building on a lineup that already includes the Apple Card, peer-to-peer Apple Pay payments, and the Wallet app.
While the move could reduce Apple's reliance on third-party partners, it could also help the company expand into other countries. Apple Pay, for example, is available in 70 countries and regions worldwide. Apple Card, on the other hand, is only available in the U.S.
Apple is also reported to be working on related projects, including a hardware subscription service that would allow users to own iPhones with monthly payment plans. Analysts believe that the company could stick with third-party financial partners at first to offset any potential risks, however.
The company is also said to be developing a new "buy now, pay later" platform in partnership with companies like Goldman Sachs and Affirm subsidiary PayBright. Apple launched the Affirm program in Canada back in 2021.
One of the first parts of "Project Breakout" could be a first-party credit card processing tool that could replace its use of CoreCard. Bloomberg Wednesday's report claims that Apple could first rely on its first-party financial services for the rumored "buy now, pay later" program.
Read on AppleInsider
Comments
It would also be damn near impossible because doing so would create a long list of business and Government enemies for Apple. Any moves in this direction will have to be turtle slow. But one can dream.
All in all it's just the new 1% trying to wrest control from the old 1%.
Plus the obligatory...
https://www.youtube.com/watch?v=YQ_xWvX1n9g
Would definitely be one way to use their gigantic cash pile.
At some point diverging from core competencies runs a big risk of dilution.
I'd be curious to understand the internal rationale for this. Has Apple revived its Not-Invented-Here Syndrome? This had been somewhat in remission—or at least softened and muted a bit—for a while. But it appears to have come roaring back.
As to the one comment about keeping or launching under a non-Apple brand, I agree. But I also think Apple would have been wiser to launch—or keep—other things under non-Apple brands such as Beats (music service, headphones, even smart speakers), TV+ (buy "Netflix" and Apple-ize it while maintaining the Netflix brand), Fitness+ (buy Peleton and Apple-ize it while maintaining the Peleton brand), Card, even iCloud, etc.
There's either corporate ego at play here with the desire to have everything branded as products and services or the—possibly misguided—belief that they can transfer all brand equity to almost anything. I'm not sure there are tons of examples of success for that in business, marketing, and branding history.
Apple runs a risk here of essentially diluting the Apple brand and getting to the point where Apple means everything and—as a result—nothing.
crypto is meant to be decentralized. no point in a centralized apple coin. great decentralized cryptos already exist, such as nano
https://www.reddit.com/r/WallStreetBetsCrypto/comments/qatu2e/nano_the_supply_squeeze_of_2022_dd/
Anyone can start a cryptocurrency and mint millions of coins by typing a command on the computer and decree that it's a limited supply crypto. Then transactions are recorded on a decentralized blockchain.
This is what makes crypto so untrustworthy because hundreds of people are making new coins out of thin air and convincing people to buy them. There was a streamer who did this recently and scammed people out of $500,000:
https://marketrealist.com/p/ice-poseidon-crypto-scam/
Apple already has a cash proxy in the form of gift cards that are used by some to scam people out of money:
https://support.apple.com/gift-card-scams
https://www.forbes.com/sites/daveywinder/2020/07/27/apple-sued-over-alleged-1-billion-app-store-and-itunes-scam-gift-card-fraud/
Instead of those, Apple can tell people to buy Coins that go in a wallet and can be used for any Apple transaction. If Apple maintains control over the transactions, they can block fraudulent transactions more easily as they can limit them by default to being within the same country or region or to known recipients.
There should probably be a single coin for this purpose that has the ability to be restricted by retailer so that each retailer doesn't have to implement their own coin from scratch. The coin creator (company formed by multiple retailers) would mint coins that have zero value. Then the retailer tags the coin with their id and sells them to customers and they can keep a ledger of coins they sold. They would redeem the same valid coins.
They don't really need the concept of coins to do this, they could just as easily use fiat currency with wallet to wallet transactions but fiat currency isn't limited to spending in store so the branded coins can be a more secure alternative to gift cards.