Global Banking Monitor

Sunday, May 28, 2023

SVB’s primary debtor in Canada revealed as Romanow’s tech finance firm

The bankruptcy liquidator in charge of Silicon...

German growth outlook deteriorates, impacting the global economy

Germany suffered its first recession since the...
HomeOpinionApple Financing: It's actually...

Apple Financing: It’s actually happening

This is an opinion post by our Analyst team.

First, let’s have a stream of consciousness from the banking market:

For years now, every technology presentation to the executive team or board of a bank has included some sort of mention of GAFA, NAFA, MAFNA, MAAA — letters equating to something like “Google Alphabet Apple Facebook Meta Amazon Netflix Microsoft” and generally interchangeable.

They’re coming for your customers,” went the phrase.

Your margin is my opportunity,” is a popular quote (the Jeff Bezos-Amazon-will-kill-you line).

Banking is necessary, banks are not,” is nearly always used, usually next to a big black and white photo of a smiling Bill Gates.

Apple is going to kill your bank,” is yet another popular, tired prediction.

Bank executives the world over, especially those outside of the direct gravity of Silicon Valley openly scoffed.

“Tell that to the Central Bank,” they would reply, fully confident in the rock-hard reality that nothing substantial will be changing in their own markets in the foreseeable future. Or, at least, nothing will require the bank CEO to actually do anything dramatic before he or she has moved on from their position in a few years.

Yes the front-end layer could well be dominated by whatever acronym is popular right now and yes, the bankers in America might have to deal with the Googles and Apples, but it’s good luck and who cares for the rest of the world, at the moment.

And while we’re at it, these tech players don’t want to get into the mess of actual banking, right?

Look at the mess. We have to deal with this every day, say the bankers. There is no way these ‘Silicon Valley kids’ are going to want to handle paper-based KYC. They’ll pass all that mess to the banks, anyway. Just exactly as Apple has done with Goldman, Deutsche Bank and so on.


Oh, so Apple are doing it themselves, are they? And those ‘Silicon Valley kids’ aren’t actually all 21-year-old know-nothings. Some of them are very serious, strategically minded executives sitting on a war chest of many, many billions and the technical delivery capacity to achieve whatever they want within months. And an unrivalled direct channel to millions of customers.


OK let’s stop the stream of consciousness and get to the detail:

Apple’s announcement yesterday that they’re launching Apple Pay Later is a stimulating milestone move because it’s the first time we’ve seen the direct mention of this phrase in the app screenshot:

Loans made by Apple Financing LLC

In the past Apple has been the front-end for these kinds of activities. Take Apple’s UK financing activities – they’re nothing to write-home about and the small print shows the actual reality:

Consumer finance on the Apple Online Store is brokered by Apple Retail UK Limited which offers finance from a restricted range of finance providers and Barclays Partner Finance, which is a trading name of Clydesdale Financial Services Limited, a member of the Barclays Group.

The press release goes a bit further:

Apple Pay Later is offered by Apple Financing LLC, a subsidiary of Apple Inc., which is responsible for credit assessment and lending. Apple Financing plans to report Apple Pay Later loans to U.S. credit bureaus starting this fall,5 so they are reflected in users’ overall financial profiles and can help promote responsible lending for both the lender and the borrower.


Some of those guffawing bank executives will be crossing their arms with confidence, excited to see just how Apple deals with all the usual fraud issues along with non-performing loan challenges. Not for nothing do banks have large teams dedicated to dealing with customer correspondence and chasing of payments.

One would imagine, however, that a lot of the modelling has already been done: With millions upon millions of Apple Pay purchase behaviours to analyse, the team at Apple Financing will probably be feeling pretty confident with their ability to manage.

There is no immediate need for the banking industry to respond, unless you’re based in the United States and finding yourself competing in the personal loan space against one of the world’s largest companies. Outside the US, banks will no doubt be watching carefully.

The various futurists who have predicted this move can pat themselves – finally – on the back. Finally, Apple appears to have directly dipped a toe into the financial market with Apple Pay Later.

Latest Featured Post

Apple extends their FinTech ecosystem with 4.15% APR Savings account

Apple's FinTech domination plans are continuing! It's incredibly exciting to watch how they are positioning their selection of products and services, especially when it...

Latest Award

National Bank of Kuwait: Best App Update, 2023

29th March 2023, Dubai: We've been closely following the mobile banking launches in Kuwait recently and this week we wanted to call attention to...

Recently published

More from Author

Only 25% of UAE Banks have a tech chief on their executive committee

We were astonished when we looked at the figures from our...

Qatar Central Bank’s FinTech Strategy

There was a lot of buzz across the GCC region recently...

An irrational market? You don’t say?

This is an opinion piece by our Analyst Team. We had to...

UBS to buy Credit Suisse for $2bn (Maybe) [Updated]

This is an opinion piece by our Analyst Team. Update on 20th...

SVB’s primary debtor in Canada revealed as Romanow’s tech finance firm

The bankruptcy liquidator in charge of Silicon Valley Bank’s Canadian unit is set to receive offers for its loan book on Monday, and the biggest asset is a loan to e-commerce lender Clear Finance Technology Corp., according to people with knowledge of the matter. Toronto-based Clear Finance, which...

Central banker calls for wage restraint in Iceland to slow down inflationary trends

Iceland’s labor market parties must rein in wage growth to help slow interest rate hikes, according to the central banker in charge of western Europe’s most aggressive monetary tightening campaign. “We are a country of consensus and so far we have not been able to reach consensus with...

German growth outlook deteriorates, impacting the global economy

Germany suffered its first recession since the start of pandemic, extinguishing hopes that Europe’s top economy could escape such a fate after the war in Ukraine sent energy prices soaring. Those troubles risk spilling over to the rest of the continent, which for decades has relied on Germany...

ECB reaches a significant stage of rate tightening, says Makhlouf

The European Central Bank is in the final stretch of its historic cycle of interest-rate increases, according to Governing Council member Gabriel Makhlouf. “Given our current outlook for inflation, we are likely to be close to ‘the top of the ladder,’” he said Saturday in Dubrovnik, Croatia. “So...

Bond traders widen their focus to potential risks beyond the debt ceiling

Bond investors are beginning to look beyond the debt-ceiling quagmire even as Treasury Secretary Janet Yellen’s warnings about when the US will run out of borrowing capacity become more pointed. What lies beyond is a bit troubling. While the Treasury department’s cash pile has slumped to levels last...

Former BOE hawks predict UK interest rates to reach the “pain level” of 6%

Hawkish former Bank of England rate-setters warned that interest rates will need to soar as high as 6% to stamp out inflation, a level the central bank has identified as painful for households and businesses. Willem Buiter, Andrew Sentance and DeAnne Julius, each of whom previously served on...

The West Coast emerges as a prominent epicenter of bank turmoil in 2023

One half of the country is experiencing the banking turmoil of 2023 quite differently than the other half. Three of the four banks that collapsed so far this year were in one state: California. Two of them were headquartered roughly 45 miles apart in San Francisco and Santa...

France receives another credit rating warning

The outlook on France’s credit rating was reduced to negative from stable by Scope Ratings, raising questions about President Emmanuel Macron’s efforts to spur growth and reduce a crisis-swollen debt burden. The Europe-based credit rating firm said it changed the outlook on its AA rating due to weakening...

IMF urges Fed to raise rates more, stating “The job is not quite yet done”

The International Monetary Fund said Friday in a new report that the US can avoid a recession this year, and that the Federal Reserve should raise interest rates again and hold them there through late next year. Amid persistent inflation, the IMF says the Fed needs to raise...

Investors foresee increased interest rates amidst growing inflationary pressures

Stronger than expected US inflation and a bump in consumer spending have fuelled worldwide expectations that interest rates will go higher, as predictions about future monetary policy rapidly shift. The Federal Reserve’s preferred measure of inflation overshot expectations in April, data published on Friday showed, while US consumer...

China’s industrial profits suffer an 18% decline in April due to sluggish demand

Profits at China's industrial firms slumped in the first four months of 2023, official data showed on Saturday, as companies continued to struggle with margin pressures and soft demand amid a faltering economic recovery. Profits fell 20.6% in January-April from a year earlier, compared with a 21.4% decline...

India central bank likely to reduce rates by end of financial year, predicts Kotak Bank treasury chief

The Reserve Bank of India (RBI) may cut interest rates only towards the end of the financial year despite a moderating inflation, Kotak Mahindra Bank's treasury chief said. "Inflation has come down, but core is not coming down that much. Some of it is base effect which they...