Does Apple Set to Develop in House Technology for Payment Processing?

The company that started as a computer company in the late 70s has come a long way. Not only does it deal with computers and tablets, but it has gone beyond the constraints of the technology industry. The products it creates can reach the unthinkable and make its users addicted to itself. And now, the company is ready to spread its wings further. Apple has decided to work on an in-house payment processing technology which is a big step for this company.

The company currently provides services like Apple Card, provision to upgrade iPhones through Citizen Bank, and Green Dot for Apple Cash via Goldman Sachs Bank and CoreCard company. The two companies have been responsible for extending Apple's financial services to the customer base. Since Apple is famous for always coming up with something new and providing features people did not even know they wished for, it has finally decided to step into the financial sector, as reported by Bloomberg.

As per the report, this is a multi-year plan and might get delayed. The cause of the delay is yet to be known, but it has been pointed out that the chances of Apple working with Goldman Sachs Bank and CoreCard company are very bleak.

The new Apple  in-house payment processing technology will be responsible for,

  • Subscription services for hardware: This service will allow the users to get the product in advance and pay the money later. The payment can be made in installments with the help of Apple.

  • Buy Now, Pay Later: As mentioned above, customers will have the option to get the Apple product in advance, and they can use any of the methods available by Apple to make the payment in the future. This is a separate service that happens to be a key feature in the hardware subscription scheme.

  • Apple Pay in 4: The name given to a long-term payment plan option. This will be executed via the "Appl Pay Monthly Installments," and the payment will be divided into 4 parts. All the payments will be made via in-house payment processing technology currently in development.

  • In-house risk management tools: Goldman Sachs is currently responsible for handling the risk management function involved with the transactions. When Apple develops the tool, this contract with Goldman Sachs will end.

Other more elaborate features to be included are,

  • Fraud Analysis

  • Credit Checks and Dispute Handling  

  • Calculating Interests and Rewards

  • Approving Transactions, increasing Credit Limit 

  • Reporting Data to Credit Bureaus

With so many plans lined up for execution, Apple is certainly keeping its hands full. Since this is a multi-year plan, this could take some time for the company to shift the financial services in-house properly. As per Bloomberg, with the news of Apple’s in-house payment processing technology development spreading like wildfire, the chances of Apple continuing to work with the current partners are very small.


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