Enlarge / The featureless, very Apple-like physical Apple Card.
Apple plans to build its own in-house financial services technology and infrastructure, according to a Bloomberg report citing people with knowledge of the matter.
The initiative is internally codenamed “Breakout” as a nod to the idea that users should break away from the current incumbents in the financial system.
Apple has long maintained a philosophy of controlling as much of the user experience as possible — and its own pipeline — because it believes this method offers the twin benefits: better experiences for customers and a bigger slice of the revenue pie for Apple. This control also means that Apple can be less affected by surprises or failures by external partners.
That philosophy is now being thoroughly applied to financial services, a fast-growing but relatively new part of Apple’s overall product strategy. According to Bloomberg’s sources, the plans would include “payment processing, lending risk assessment, fraud analysis, credit checks and additional customer service functions such as dispute handling.”
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The sources add that Apple’s move to bring all of this indoors is aimed at upcoming products, not current ones. For example, Apple Card could still stay with Goldman Sachs.
And in some cases, like the company’s planned Apple Pay Later feature, Apple could — at least initially — rely on a partner for some aspects like long-term lending, while using its own technology and infrastructure for short-term lending.
Apple Pay Later has been cited as one of the features these new plans are likely to apply to, and Apple also has other new financial products in the works, like a subscription service package for iPhones and some Apple services.
The company’s growing emphasis on financial services reflects its efforts to deviate from what some call a “success-based” business — like a new iPhone or other product that fails due to various factors, some of which are beyond Apple’s control may or may not generate great demand. to more consistent, recurring revenue from customers.