What if Apple becomes a bank like any other?


Still looking to diversify its revenues, Apple is building its banking offering in the United States brick by brick, which will soon be enough to attack the European market.

Here is a new bowstring from the Apple company. In collaboration with the investment bank Goldman Sachs, Apple launches a remunerated savings account offer, logically called Savings (which in English means “savings”), in order to expand the banking ecosystem that the company is building step by step. by step since then. few years.

This offering, currently only available in the US, is expected to roll out in the coming months. Specifically, it will allow American holders of the Apple Card, launched with Goldman Sachs in August 2019, to transfer their “cashback” to a high-yield account.

Encourage users to save

The Daily Cash program, supported by the Apple card, allows users to benefit from a cashback ranging from 1 to 3% of the purchase price, which can now land directly in the users’ Apple savings account. An account that they can also fund by transferring funds from another bank account.

With no commissions or minimum deposits, the Apple Savings Account will be usable directly through the Wallet mobile app, which allows users to send and receive money. They will be able to consult the balance of their account and the amount of interest accumulated over time. What encourages users to save and grow their money?

“Saving allows Apple Card users to increase their Daily Cash rewards over time, saving for the future,” said Jennifer Bailey, vice president of Internet Services and Apple Pay. “Saving thus strengthens the interest of Daily Cash […] while providing an easy-to-use tool to help users clean up their finances. “

Apple intends to reduce its reliance on the iPhone

Apple also announced last June the launch of a split payment service, Apple Pay Later (ability to split a payment into up to four installments without paying interest), which will be available in the United States in 2023. The company à pomme is thus progressively interfering with the payments, banking and financial services sector. A way to diversify their revenues by focusing on services, to be less dependent on the sale of computers and phones, two markets currently at half-auction. The IDC firm expects computer and smartphone sales to decline by 12.8% and 6.5% respectively worldwide in 2022, after two years of growth.

As for Apple, the sales of the iPhone 14 and iPhone 14 Plus, launched in September, are disappointing. Investigative media The Information, based in Silicon Valley, says Apple has asked two suppliers of the iPhone 14 Plus to reduce production by 70% and 90%, respectively. Apple is not helped by the sharp rise in the dollar, which raises the price of its phones in third markets.

However, the Apple brand still makes half of its revenue from sales of its flagship smartphone. Hence the desire to increase its resilience by diversifying its offer and focusing on services, which include payments, but also offers such as Apple Music, Apple TV and iCloud. The share of services has thus progressively increased in the turnover of the Apple brand in recent years, reaching almost a quarter of its revenues today.

Now is also a good time to open a savings account, as the US Federal Reserve is raising interest rates to fight runaway inflation, which should prompt commercial banks to do the same. High interest rates make saving more attractive and could more easily convince Apple Card users to use the savings account. Without committing to a specific interest rate, the Apple brand said it would be competitive with the best rates currently available in the market.

Apple is thus building an ecosystem of services step by step that could ultimately make Apple Pay a rival solution for traditional banks. Carefully, the company works with a trusted partner for the time it takes to familiarize themselves with this new market and then fly alone. “Financial services can be an important market for Apple. Note, however, that they currently offer their services in partnership with a banking institution, which means they share their margins with them. Hand with a partner whose core business is , before they go only when they have acquired sufficient expertise, “analyzes Emilien Bernard-Alzias, associate attorney at Simmons & Simmons, specialist in financial services regulation.

Trading, the next step for Apple?

For the lawyer, Apple is also looking to refine its strategy around fintechs, building a full range of solutions in the US before launching an assault on the European market. According to him, it is the current lack of maturity of its solution, much more than the regulations, that is holding back Apple from immediately launching into the Old Continent.

“We can imagine that first of all they want to master this job from top to bottom, which is new for them. They are probably also aware of the fact that the European market is already very mature in terms of banking and financial services. The European players offer, in addition to payment services, wallets and cashbacks, split payment solutions, but also on the stock exchange and cryptocurrencies, for example. Many things that Apple does not yet do “, explains Emilien Bernard Alzias. In addition to European players like Revolut and Lydia, the Old Continent also has American players like Robinhood, just landed with its full range of services. “In my opinion, once they become familiar with this new profession and are ready to provide the full range of traditional banking services, they will conquer new markets, especially Europe.”

To attract a rather young and tech-eager clientele, which is Apple’s main focus for its banking services, the Apple brand will no doubt have to offer stock market services, according to the lawyer. “It’s an audience that is really looking to grow their savings by putting them in a suitable account, but they also want to have fun buying some stocks on the left, some cryptocurrencies on the right.”

It would therefore not be surprising to see Apple forge an alliance with a stock buy and sell app or cryptocurrency exchange in the near future.

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