Apple Discontinues Apple Pay Later, A Limit to Apple’s Fintech Ambition, Apple’s Predicament
We begin with my thoughts on Apple discontinuing Apple Pay Later. We go over the “why” behind the move. The discussion then turns to Apple’s fintech ambition. We look at where Apple has likely drawn a line in the sand as to what can be done internally in the fintech space versus partnering with existing institutions. The update concludes with a closer look at Apple’s predicament in the space.
Hello everyone. Today’s update will be focused on Apple Pay Later news.
Let’s jump right in.
Apple Discontinues Apple Pay Later
At WWDC 2022, Apple announced it was getting into the Buy Now, Pay Later (BNPL) space with a product called Apple Pay Later.
Apple Pay users in the U.S. would be able to split a purchase into four equal payments across six weeks with zero interest and no fees. Consumer loans are underwritten to facilitate BNPL purchases.
Apple Pay Later saw a limited launch in March 2023 with a broader rollout last October.
Last week, the following was posted to Apple’s Pay Later support page:
“Apple Pay Later is no longer offering new loans. Existing Apple Pay Later loans and purchases are not affected.”
That is another way of saying that Apple Pay Later has been discontinued. In a statement to various publications, Apple provided clarification to 9to5Mac:
“Starting later this year, users across the globe will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay. With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S. Our focus continues to be on providing our users with access to easy, secure and private payment options with Apple Pay, and this solution will enable us to bring flexible payments to more users, in more places across the globe, in collaboration with Apple Pay enabled banks and lenders.”
Apple Pay Later discontinuation is timed to coincide
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Apple to Exit Goldman Sachs Partnership, Apple’s Problem With Banks, Apple’s Solution
Hello everyone. In today's update, we will go over the big Apple / Goldman Sachs news. Neil looks at what the news means and doesn’t mean. In addition, the discussion includes a look at Apple’s major problem with banks and possible solutions management can pursue to overcome the problem.
An Above Avalon membership is required to read this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)
Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time.
An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-on.
Apple Launches “Pay the Apple Way” Marketing Campaign, Apple and the Pac-12 Implosion
Hello everyone. For today’s update, we look at Apple’s new Apple Pay marketing push. The discussion then turns to craziness in the sports world as Apple finds itself at the center of the Pac-12 implosion.
Let’s jump right in.
Apple Launches “Pay the Apple Way” Marketing Campaign
“Apple is doubling down on its fintech ambitions with ‘Pay the Apple Way,’ spotlighting the no-hassle framework of its Pay feature via an expansive campaign that could help market additional payment tools from the company that were unveiled earlier this year. Among the new features is a high-yield savings account for Apple Card users, announced in April, which has since reached over $10 billion in deposits. Apple also began rolling out its buy now, pay later program in March.
‘Pay the Apple Way’ is meant to present a solution to the inconveniences of traditional money-dealing like carrying around a bulky wallet, struggling to find the right card and feeling concerned about privacy. Apple is flexing the ease of its Pay feature, which allows payments to be made directly from an Apple device, with a DOOH [digital out-of-home] experience that’s being billed as both dynamic and immersive, per release details. The ads will appear across prominent street and mall placements in London, Birmingham and Manchester in the UK along with Atlanta and Dallas in the U.S., touting straight-forward messages like ‘Your watch is your wallet’ and ‘Pay the secure way.’”
In addition to the physical marketing (examples shown below), Apple is also spending money on video advertisements and social media with Apple Pay campaigns on X and TikTok.
This marketing campaign comes as society returns to pre-pandemic behavior in terms of leisure, travel, and spending time out and about. The value found with mobile payments increases as people spend more time out of the home.
Apple Pay adoption among merchants has not been an issue outside the U.S. given the proliferation of contactless payments. In the U.S., after years of work to improve merchant adoption, digital payments like Apple Pay are on the verge of finally being described as widely accepted.
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Apple Launches High-Yield Savings Account, Apple’s Great Timing, Apple’s Expanding Fintech Play (Daily Update)
Happy Tuesday. We begin today’s update with an examination of Apple’s new savings account (in partnership with Goldman Sachs). The discussion goes over three things about the account that jumped out at Neil. We then go over how Apple has great timing with this savings account and how the new product fits within Apple’s broader fintech play.
Apple Launches High-Yield Savings Account
In a press release issued yesterday, here’s Apple:
“Starting today, Apple Card users can choose to grow their Daily Cash rewards with a Savings account from Goldman Sachs, which offers a high-yield APY of 4.15 percent — a rate that’s more than 10 times the national average. With no fees, no minimum deposits, and no minimum balance requirements, users can easily set up and manage their Savings account directly from Apple Card in Wallet.
‘Savings helps our users get even more value out of their favorite Apple Card benefit — Daily Cash — while providing them with an easy way to save money every day,’ said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet. ‘Our goal is to build tools that help users lead healthier financial lives, and building Savings into Apple Card in Wallet enables them to spend, send, and save Daily Cash directly and seamlessly — all from one place.’
Once a Savings account is set up, all future Daily Cash earned by the user will be automatically deposited into the account. The Daily Cash destination can also be changed at any time, and there’s no limit on how much Daily Cash users can earn. To build on their savings even further, users can deposit additional funds into their Savings account through a linked bank account, or from their Apple Cash balance.”
Like Apple Card, this savings account is run through Goldman Sachs. This means Apple doesn’t need to have a banking charter and get bogged down by regulatory items. More on this shortly.
It’s not fair to say this is just a Goldman Sachs savings account wrapped in an Apple shell or covering.
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Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.
More information about Above Avalon membership, including the full list of benefits and privileges, is available here.