While Apple’s primary focus remains hardware and software, the company is certainly not limited to those things. Elements like Apple TV+ and the Apple Card stand out, for instance. And apparently Apple has plans to broaden the scope for its finance products thanks to major changes happening behind the scenes.
It starts with a plan to bring Apple’s financial services in-house, according to Bloomberg, a plan that will take multiple years to see through. The goal? Ultimately to reduce the need for third-party partners like Goldman Sachs, which helped Apple launch the aforementioned Apple Card.
To get there won’t be easy, though, and it will have to include a variety of different elements. To that end, the original report says Apple is trying to cover all of its bases, with the company developing its own payment processing technology and infrastructure. But, that’s just the tip of the iceberg.
From there, Apple is also working on fraud analysis, handling disputes, risk assessment, and even credit checks. Add to that, reporting information to appropriate credit bureaus, calculating interest, deploying rewards, and approving transactions. The project is known, in part, as “Breakout,” which seems apt.
The thing to be aware of here is these new initiatives, and Project Breakout in general, are meant for future products and not what’s available right now. Meaning, even if Apple does go through with this (and none of these elements seem impossible for the company as a whole), current offerings may stay the same.
Which means the Apple Card will continue to be a partnership between Apple, Goldman Sachs, and CoreCard. GreenDot will more than likely continue to assist Apple with Apple Cash, and Citizens Bank may remain a partner for the iPhone Upgrade Program. At least for the foreseeable future, anyway.
So what does Apple have on the way based on the rumor mill? Good question. In July of 2021 we heard that Apple (working with Goldman Sachs) was working on a “buy now, pay later” service known as “Apple Pay Later.” Whether or not that actually falls into this new strategy for Apple, which would ultimately mean it doesn’t need to team up with Goldman Sachs, remains to be seen.
(It’s also worth noting that Apple is working with a company called Affirm, which already handles “buy now, pay later” efforts, in Canada.)
In addition to that, Apple is also reportedly working on a brand new subscription service, but this one’s meant for hardware rather than software. It would be interesting to see if this new subscription model is just the tip of the iceberg for Project Breakout.
First, though, is this “buy now, pay later” effort, according to the original report:
The first product that will rely on the new system is expected to be the upcoming “buy now, pay later” service. That feature, called “Apple Pay Later” internally, will have two parts: “Apple Pay in 4” for short-term, four-installment payment plans without interest and “Apple Pay Monthly Installments” for long-term payment plans with interest.
Apple is discussing using the in-house technology for the four-installment plan. Apple would continue to work with Goldman Sachs on the longer-term installment offering, which will also have a higher maximum lending amount. The company is considering additional partners beyond Goldman Sachs as well, letting it offer competing plans with different interest rates and payoff deadlines.
And finally, the report tells us that Apple has faced some “hurdles” when it comes to developing all of these plans. So that tells us Apple may delay any and all of these features. But, for now, it’s a rumor we’ll just have to wait and see if it turns into a real thing.