Apple working on first-party financial services under codename 'Breakout'

Posted:
in General Discussion
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
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

  • Reply 1 of 14
    jas99jas99 Posts: 148member
    This project will propel the stock price significantly higher. 
    byronlwatto_cobra
  • Reply 2 of 14
    JWSCJWSC Posts: 1,203member
    I imagine the initial AppleBank rollout could feature blockchain based AppleCoin™ operating at near break even margins to support fast banking services growth.  Imagine getting reasonable interest rates and no nickel and diming customers with hidden fees.  Imagine an open and honest bank.  It would be revolutionary.

    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.
    InspiredCodewatto_cobra
  • Reply 3 of 14
    This feels like an Apple Car financing move. Hopefully they follow Tesla and take on auto insurance too. AppleCare for cars. Would love to see improved Mac financing too. They really should have 2-3 year financing for Macs to reflect most peoples upgrade cycle better. It used to be 18 months, but dropped back to 12 months with Goldman Sachs.
    edited March 2022 JWSCbyronlwatto_cobra
  • Reply 4 of 14
    JWSC said:
    I imagine the initial AppleBank™ rollout could feature blockchain based AppleCoin™ operating at near break even margins to support fast banking services growth.  Imagine getting reasonable interest rates and no nickel and diming customers with hidden fees.  Imagine an open and honest bank.  It would be revolutionary.

    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.
    I would love to see Apple get in to both crypto and trading. Secure crypto storage feels like a core Apple competency. Not sure about AppleCoin, but an environmentally friendly crypto option would be great. We need to get away from the Chinese coal burning crypto mining farms.
    edited March 2022 williamlondonbyronlrobabawatto_cobra
  • Reply 5 of 14
    paxmanpaxman Posts: 4,729member
    I'd like Apple to branch off its financial services into another company. Somehow it doesn't sit well with me that the company that produces my phone and computer also does banking. AppleBank? Ugh! A lot of this is optics, I know, but optics are important. 
    robabawatto_cobra
  • Reply 6 of 14
    hmlongcohmlongco Posts: 532member
    We need to get away from the Chinese coal burning crypto mining farms.
    Fixed that for you. Just get away from crypto altogether.

    All in all it's just the new 1% trying to wrest control from the old 1%.

    edited March 2022 foregoneconclusionwilliamlondonwatto_cobra
  • Reply 7 of 14
    crowleycrowley Posts: 10,453member
    If Apple “gets into crypto” then I’m done with them.
  • Reply 8 of 14
    zimmiezimmie Posts: 651member
    I wonder if today's Apple Card is the Motorola ROKR, and this stuff they're planning is the iPhone.

    Would definitely be one way to use their gigantic cash pile.
    byronlwatto_cobra
  • Reply 9 of 14
    I’m not reapplying for an Apple Card if they take over from Goldman Sachs 
    williamlondon
  • Reply 10 of 14
    byronlbyronl Posts: 356member
    JWSC said:
    I imagine the initial AppleBank™ rollout could feature blockchain based AppleCoin™ operating at near break even margins to support fast banking services growth.  Imagine getting reasonable interest rates and no nickel and diming customers with hidden fees.  Imagine an open and honest bank.  It would be revolutionary.

    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.
    I would love to see Apple get in to both crypto and trading. Secure crypto storage feels like a core Apple competency. Not sure about AppleCoin, but an environmentally friendly crypto option would be great. We need to get away from the Chinese coal burning crypto mining farms.

    crypto is meant to be decentralized. no point in a centralized apple coin. great decentralized cryptos already exist, such as nano
  • Reply 11 of 14
    MarvinMarvin Posts: 15,309moderator
    byronl said:
    JWSC said:
    I imagine the initial AppleBank™ rollout could feature blockchain based AppleCoin™ operating at near break even margins to support fast banking services growth.  Imagine getting reasonable interest rates and no nickel and diming customers with hidden fees.  Imagine an open and honest bank.  It would be revolutionary.

    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.
    I would love to see Apple get in to both crypto and trading. Secure crypto storage feels like a core Apple competency. Not sure about AppleCoin, but an environmentally friendly crypto option would be great. We need to get away from the Chinese coal burning crypto mining farms.
    crypto is meant to be decentralized. no point in a centralized apple coin. great decentralized cryptos already exist, such as nano
    There's no requirement for crypto to be decentralized and the main thing that is decentralized is the ledger/blockchain, the coin creation doesn't have to be. Nano supply seems to have been fixed at the start:

    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.
    robaba
  • Reply 12 of 14
    robabarobaba Posts: 228member
    paxman said:
    I'd like Apple to branch off its financial services into another company. Somehow it doesn't sit well with me that the company that produces my phone and computer also does banking. AppleBank? Ugh! A lot of this is optics, I know, but optics are important. 
    Agreed.  Without a firewall of some kind it will bring the Antitrust hammer down hard—hard enough to shatter the company Bell Telephone style.
    watto_cobra
  • Reply 13 of 14
    robabarobaba Posts: 228member
    Marvin said:
    byronl said:
    JWSC said:
    I imagine the initial AppleBank™ rollout could feature blockchain based AppleCoin™ operating at near break even margins to support fast banking services growth.  Imagine getting reasonable interest rates and no nickel and diming customers with hidden fees.  Imagine an open and honest bank.  It would be revolutionary.

    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.
    I would love to see Apple get in to both crypto and trading. Secure crypto storage feels like a core Apple competency. Not sure about AppleCoin, but an environmentally friendly crypto option would be great. We need to get away from the Chinese coal burning crypto mining farms.
    crypto is meant to be decentralized. no point in a centralized apple coin. great decentralized cryptos already exist, such as nano
    There's no requirement for crypto to be decentralized and the main thing that is decentralized is the ledger/blockchain, the coin creation doesn't have to be. Nano supply seems to have been fixed at the start:

    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.
    I’d be much more confident if the Federal Reserve filled this void.
    watto_cobra
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