According to Bloomberg, Apple is working on a multiyear strategy to bring its financial services in-house in the future, reducing the need for financial partners such as Goldman Sachs. Apple is working on payment processing technology and infrastructure such as lending risk assessment, fraud analysis, credit checks, and dispute resolution, as well as tools for calculating interest, rewards, approving transactions, reporting data to credit bureaus, increasing credit limits, and other tasks. Internally, this initiative is dubbed "Breakout" since it would see Apple abandon its present banking systems.
Apple now collaborates with Goldman Sachs Bank and CoreCard for the Apple Card, Green Dot for Apple Cash, and Citizens Bank for the iPhone Upgrade Program, but according to Bloomberg, Apple's work on financial services will be geared at future products rather than existing items.
Apple already has Apple Pay and Apple Card, and it is working on a future hardware subscription service as well as a "buy now, pay later" option for Apple Pay purchases.
The "buy now, pay later" option, internally known as "Apple Pay Later," is likely to be the first product to use Apple's new method. There will be a four-payment Apple Pay purchase option called "Apple Pay in 4," as well as a long-term payment plan called "Apple Pay Monthly Installments." The Apple Pay in 4 feature might make advantage of Apple's in-house payment processing, while Goldman Sachs would handle long-term financing.
In the future, Apple might utilise its new system to support its hardware subscription plan, as well as function as a lender for further "buy now, pay later" services. To begin, Apple could limit risk by requiring customers to use debit cards, and its in-house risk assessment tools could consider Apple purchase history as well as factors such as whether a credit card linked to the App Store has been declined to determine whether a customer can use the payment services.
According to Bloomberg, Apple has encountered some "hurdles" in developing its financial services product, so there is a risk that it may have to postpone its plans or continue to collaborate with partners, though this is "extremely improbable."
