Pushing deeper into financial services, Apple will deal with credit checks and loan approval itself within its new Apple Pay Later service.
Mark Gurman for Bloomberg News:
A wholly owned subsidiary will oversee credit checks and make decisions on loans for the service, which is called Apple Pay Later. The business — Apple Financing LLC — has necessary state lending licenses to offer the feature, though it operates separately from the main Apple corporation, the company said.
The move marks the first time Apple is handling key financial tasks like loans, risk management and credit assessments… Until now, Apple’s financial services have been backed by third-party credit processors and banks. The Apple Card credit card, for instance, relies on Goldman Sachs Group Inc. for lending and credit assessment.
Goldman Sachs retains a smaller role in the new program. The financial firm is the issuer of the Mastercard payment credential that’s used to complete Apple Pay Later purchases. Apple Financing doesn’t have its own bank charter.
MacDailyNews Take: It makes perfect sense:
I’ve always wanted to own and control the primary technology in everything we do. — Steve Jobs
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Great little product to use as a way grow the capability within Apple. Won’t take long before they’ve grown their own fully-fledged bank.
May that never come to pass.
Apple is looking more and more like General Electric with every passing year. This is not a good trend.
I urge Apple to be careful getting into the financial service business. Look at the great US companies destroyed by taking the same risk. It looks like goldmine, but financial service comes with enormous risks if you don’t know what your are doing.