Apple services revenue now 20% of all sales, and that’s before these 3 major 2023 fintech plays


As Apple expands further into fintech with their new savings account, Bloomberg reports that 8.2% of Apple sales came from services in 2012, which grew to 19.8% in 2022. The savings account is Apple’s second major fintech move of 2023. Apple Pay Later was the first, and that product will expand into a third credit card-like initiative imminently. Here’s a recap, and a theory why Apple is the only Big Tech winning mainstream trust in consumer banking.

– This month, Apple goes deeper into fintech with their new high-yield savings account that claims to pay interest that’s 10x the average paid by banks right now.

– Apple savings, powered by Goldman Sachs for U.S. users and limited to deposit caps of $250k per customer, has no fees and no minimum balances.

– All you have to do is set it up in your Apple Wallet.

– Once Apple shows users their slick UX where they can see their budgeting, saving, and spending, you can imagine how this will grow.

– They already have practice showing users this kind of UX on spending with Apple Card, and the savings account is a service extension to Apple Card users.

– It’ll make Apple Card stickier even though, for now, there’s ostensibly no revenue attached to savings — because there are no fees to consumers.

– Last month, Apple launched Apple Pay Later, which lets people make purchases as low as $50 and up to $1000 then pay in installments.

– This is also ostensibly a low revenue endeavor because there’s no interest if you pay within the 6 week payback period.

– It was more of a beautiful Apple user experience that’s right on millions of phones for people already used to paying with Apple Pay.

– I must say I’ve gotten addicted to Apple Pay’s ease and rarely carry a wallet or credit card anymore.

– When Apple Pay Later launched, we noted 3 ways Apple Pay Later would eat Buy Now Pay Later competitors.

– In that piece, we asked 2 key questions:

– 1. How is BNPL not a credit card?

– 2. Why would small-dollar Apple Pay Later users not just use debit or credit if they have to repay in 6 weeks anyway?

– Bloomberg helps answer those questions, saying Apple is planning “an expanded version of the Pay Later program called Apple Pay Monthly Installments that can handle larger transactions over longer periods — while charging interest.”

– So, like, a credit card. But Apple style.

– And ostensibly not powered by Goldman Sachs so Apple’s services revenue would grow even more.

– And perhaps more important: it’s just so easy and cool for consumers.

– Buy Now Pay Later was always headed toward credit card like behavior and economics — from consumer user and regulatory expectations standpoints. Apple, like they often do, just cleaned up the business model and user experience.

Final Note: I attribute Apple’s success in fintech and consumer banking not just to superior UX. It’s also a result of their steadfast commitment to privacy. They’re arguably the only Big Tech firm that’s truly honored privacy, and this is EVERYTHING in winning trust with people’s money.


Apple, Goldman Sachs Debut Savings Account With 4.15% Annual Yield




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