Apple shifts focus as it drills deeper into payments

The banking industry has worried that Apple was planning to become a de facto bank. But recent moves suggest that Apple is determined to run the payment system's toll booths, while taking no credit risk of its own.

The payments moves that Apple announced at its June 10 annual developer conference are being hailed as competitive coups on multiple fronts — one-upping Visa’s announcement of its Visa Flexible Credential, overtaking Early Warning Services’ fledgling Paze wallet, and yet also as offering a potential benefit for card issuers and ecommerce merchants.

Apple dropped a second shoe only days later, announcing that it is discontinuing its Apple Pay Later BNPL program, executed through its Apple Card accounts. But Apple added access to BNPL loans from Affirm inside Apple Pay, as well as access to BNPL through participating payment cards in the digital wallet.

The announcements, and their implications, drove speculation of a strategic shift for Apple. The company may be subtly shifting away from being a provider of financial services while operating a payments network, to focus on the latter alone.

“There was never any chance Apple was going to try to be a regulated bank, but they were a direct financial services provider,” says Alex Johnson, consultant and creator of the Fintech Takes newsletter.


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