5 min read

How Apple is leading the charge for brands embedding finance

Melissa Stringer

The financial services pie is looking increasingly appealing, and it’s not just fintechs and digital banks who want a slice...

Lately, lots of traditionally non-FS brands are starting to offer financial products in a bid to broaden their market share. Facebook has launched Facebook Pay; Google will soon offer checking accounts.

And last year, Apple unveiled its first ever credit card (with a little help from Mastercard and Goldman Sachs). It’s just become the first US company in history with a market cap over $2 trillion… coincidence or correlation 🤔

What’s something these big brands all have in common? A strong data acquisition model.

We obviously trust them with our data (maybe too much so - remember the Cambridge Analytica scandal?). But the question now is whether we trust them with our money.

What’s something these big brands all have in common? A strong data acquisition model.

Why do we love Apple so much?

Let’s face it: Apple products are awesome.

iPhones alone make up 45% of the mobile market share in the US. Even if you’re Team Android, it’s difficult to ignore the sway of Apple’s sleek design, world-class tech and constant striving for innovation.

Even within the devices and wearables themselves - in true Steve Jobs style - we’re subtly encouraged to adopt Apple’s financial offerings over those of its competitors.

Apple Pay 📱

Apple Pay lets users make one-tap purchases with any app that uses the Apple Pay API. It’s available on virtually all Apple devices in 24 countries around the world.

Let’s take a look at some of its security features:

  • It uses the latest in Touch ID and Face ID to keep your information private.
  • Tokenisation keeps your card information safe and prevents your credit card numbers from being sent and intercepted.
  • Every purchase generates a device-specific number and unique transaction code, so your card number is never stored on your device or on Apple servers.


Apple Card 💳

This one-of-a-kind, more-than-just-a-credit-card launched in the US last year. And it’s pulled out all the stops:

  • There are no fees (hidden or otherwise).
  • It offers interest-free financing of Apple products for all card users.
  • Customers get 2% cash back upfront with every purchase.
  • Over 70% of US stores now accept Apple Cards.

But the real differentiator helping the Apple Card stand head and shoulders above the rest?

Apple is competing on an ecosystem, which is where it’s playing a completely different ball game to any other card provider. It’s leveraging payments to add to its existing offering, rather than integrating with wider financial services offerings.

For example, Apple is working with a select group of partners (such as Uber, Uber Eats and T-Mobile) and is offering the most cash back to users who spend with them.

By providing rewards in the form of Apple Pay funds (2% cashback), it’s creating a network effect & an ecosystem that no other issuer in the market can claim to emulate.

The fact that the card lives inside the Apple Wallet means it’s likely to increase the uptake of Apple Pay, especially if customers begin to recognise the benefits of having all of their payments, vouchers etc. in one place.

Apple is competing on an ecosystem, it’s playing a completely different ball game to any other card provider.

Does Apple pose a threat to fintechs?

Budget is of course a key differentiator, but the real danger lies in Apple’s enthusiastic fanbase. With billions of customers worldwide, Apple has an almost cult-like following, meaning “if they started a new yogurt, Apple enthusiasts would buy that”.

This is where fintech start-ups just can’t compete. It takes years (and some pretty tactical marketing) to build such a loyal following.

Arguably, Apple poses a greater threat to banks than fintechs and challenger brands do. Legacy systems and outdated processes will hold big banks back, whereas tech giants like Apple, Alibaba, Facebook and WeChat are already reaping the benefits of cloud computing, artificial intelligence and machine learning.

And with the increasing popularity of Banking as a Service (BaaS), big tech brands will be able to pick and choose providers to create financial services offerings without needing a banking license.

While according to a report by research firm Bernstein, Apple “probably won't pose a challenge to the card giants anytime soon” Apple Pay is still on track to account for 10% of global card transactions by 2025.

Arguably, Apple poses a greater threat to banks than fintechs and challenger brands do.

So, who will win in the trust race?

Trust is a multi-dimensional word - particularly when it comes to something as important as financial services.

People don’t just need to trust a business not to lose their money, they also need to know that they won’t be defrauded, that their sensitive information won’t be shared, and so on.

According to this Accenture survey, only 43% of people around the world trust banks to look after their financial wellbeing. And while we love challenger banks’ cheeky tone of voice and colourful design, only 17% of Brits believe they’re as reliable and trustworthy as the major players.

Apple, on the other hand, has won the hearts (and trust) of people around the world - particularly the younger generation.

It’s even played on this lack of trust for financial services with the slogan “Created by Apple, not a bank” - a truly brand-aware and anti-FS proposition. We wonder how Goldman Sachs felt about that...

As a business, Apple has always been hot on privacy and security, which is bound to stand it in good stead for a breakthrough into financial services. (Steve Jobs was beating the drum for tech privacy in 2010, long before the topic was ‘cool’.)

It’s proven its ability to safeguard our data, so perhaps it’s time we trusted it to do the same with our money. After all, “money is just a form of data.” Based on their success and growth trajectory, I think we should!

We’d love to know which company you’d like us to dive into next. Let us know in the comments section below!

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