Apple Makes A Big Leap Into The Finance Industry
Posted by Richard on August 17, 2022
Apple’s newly designed MacBook Air stole the show at the annual Apple Worldwide Developers Conference (AWDC) back in June, but the most important announcement may have been Apple’s intention to get directly involved in finance and lending with Apple Pay Later.
The tech giant already runs a payment platform called Apple Pay, which allows users to use their smartphone as a wallet and debit card. Simply scan your phone and you can quickly make payments. However, Apple Pay leans on traditional debit and credit cards. Then there’s the Apple Card credit card, but that’s run by Goldman Sachs.
With Apple Pay Later, Apple will directly extend credit to qualified customers. You can buy an Apple product — say that shiny new MacBook Air or the next-generation iPhone — and then pay it off in installments. For now, Apple’s model will break payment down into four equal parts. Apple itself will assume the risks of lending.
As of June, Apple was the most valuable company in the world, with a market cap of approximately $2.2 trillion. And at one point, Apple’s market cap approached a whopping $3 trillion. To put that in perspective, Italy’s gross domestic product has hovered around $2 trillion over the past few years. Apple also has more than $50 billion in cash, enough to buy Ford Motor Company outright.
The Apple Pay Later announcement created some waves, but wasn’t particularly surprising. Cash in hand is great for consumers, but when it comes to businesses, investors want to see money invested, not wasting away. Apple has been aggressively looking for new areas to expand into and has also been handing out dividends to reward investors. Apple Pay Later marks another aggressive move — one investors will watch closely.