Apple (AAPL) Working on In-House Financial Services - Bloomberg

March 31, 2022 6:24 AM EDT

Apple (NASDAQ: AAPL) is planning to build its own payment processing technology to power future financial offerings in a bid to reduce the company’s dependence on third-party payment processors, according to Bloomberg.

The move is part of Apple’s multi-year plan that would develop multiple financial features in-house, including payment processing technology, fraud analysis, risk evaluation for lending, credit checks, and others.

The plan revolves around Apple’s future solutions, rather than its current offerings. Shares of CoreCard (NYSE: CCRD), Green Dot (NYSE: GDOT), and Goldman Sachs (NYSE: GS) - Apple’s key banking and financial services partners - declined on the news.

Apple launched several financial services products over the past years, including the Wallet app, peer-to-peer payments, and Apple Card, among others. Furthermore, the tech giant was reported to be working on its own “buy now pay later” service, as per Bloomberg.

Part of the company’s project has been titled “Breakout”, pointing to Apple’s plan to break out of the traditional financial system.

At the moment, Apple’s payments are processed by CoreCard, a processing platform that oversees the journey of sending transaction details to a bank. Goldman Sachs handles some of Apple’s credit card components including lending, customer service tasks, ledgers, and more.

Apple is likely to continue its collaboration with Goldman and CoreCard for its current lineup of financial products, the report says.

The world’s largest company by market cap has had success with financial services offerings so far. Apple Pay was launched 8 years ago and is now one of the key Apple services, contributing nearly $70 billion a year.

Apple announced it has acquired Credit Kudos last week, an open banking credit reference agency that uses bank data to help consumers with lending decisions. Bloomberg reports that Apple will likely leverage Credit Kudos’s technology in the development of its own payment infrastructure.

Apple stock price is up 0.3% in pre-open Thursday.

By Senad Karaahmetovic

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