Apple Bank is only a matter of time

“Around early 2004, Apple Inc. executives were in a strategy meeting when they began to complain about their cellular phones,” David Weidner writes for MarketWatch. “They mocked the design, the functionality or lack of it — just about everything. Apple founder and then-CEO Steve Jobs called them ‘brain dead.’ …That meeting, of course, was the seed that eventually led to the first iPhone, debuting in 2007. It also was the making of a near-fatal blow to the cell-phone establishment at the time.”

“It’s only a matter of time before Apple, or another technology company, launches a bank. No, we’re not talking about simply partnering with a bank or just linking with a payment system such as Visa or MasterCard but actually becoming a bank or buying one,” Weidner opines. “This week, the tech bank moved one step closer to reality when Apple announced a new tap-to-pay system called Apple Pay for its latest iPhone model[s] and newly unveiled Apple Watch.”

“Banking, for all of its strides in the online and mobile space, still ranks below other industries in customer satisfaction. It ranks behind automakers, credit unions, apparel stores, insurance companies and just a notch above the U.S. Postal Service, according to the American Customer Satisfaction Index,” Weidner writes. “All of this brings us back to that meeting more than a decade ago where Jobs called cell phones ‘brain dead.’ It’s not a fantasy to think the same conversation is going on somewhere in Silicon Valley about banking. Someone is complaining about his or her bank and thinking, ‘we can do this better.’ What’s remarkable is that, as Apple Pay shows, in many ways they already are.”

Read more in the full article here.

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  1. An Apple bank would be a straightforward extension of the new Apple Payments system. Banks come in many flavours, but Apple could pursue a simple transactional bank with, or without, a credit facility. The onerous aspects of bank regulation apply mostly to the speculative areas of banking which engender a lot of risk and which congress has thus far failed to tame.

    Apple has a mountain of cash. They could decide to make this available to blue-chip Apple customers as a line of credit to fund purchases of Apple products, or general purchases. However I suspect Apple would want to avoid anything which would place them in a position where they would find themselves in dispute with an Apple customer.

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