Apple expands fintech ambitions in iOS 16

Apple Pay later

Licensed: Apple Inc.

Apple is becoming a fintech company.

The company announced several new features for its iPhone Wallet app at its developers conference on Monday, in direct competition with products from other fintech companies like Confirm and PayPal. One of the big ones: buy now, pay later a service called Apple Pay Later. That announcement sent Affirm shares down more than 5% on Monday and another 4% drop on Tuesday morning.

Apple will also launch a new payment system later this month that will let you pay someone by tapping your iPhone with their iPhone. It is a direct competitor to UnitSquare’s. And Wallet in iOS 16 will let you track online orders that you buy through Apple Pay.

All of this points to one of the most exciting corners of the Apple ecosystem – a growing suite of financial products within the Wallet app. Many of these features aren’t designed to directly monetize Apple, but they do make Apple Pay more appealing to people who haven’t tried it. (Apple takes a very small percentage of every Apple Pay transaction, so the more people use it, the better it is for Apple.) Like most major new iOS features, it’s also a mechanism. another to keep customers locked into Apple’s ecosystem and upgrade to new iPhone versions when they’re ready.

But Apple’s new Wallet features are also coming at a time of economic uncertainty. Inflation is still going strong. Gasoline prices continue to rise to record highs. And there are a lot of very real fears about a coming recession. It can be a tough time for Apple to launch a new product designed to get people to buy more things if those trends persist throughout the year.

Apple’s new rivals to buy now, pay later have struggled in recent months as consumer spending shifts from goods to services. Other fintech and crypto companies like Robin Hood hero, PayPal and Coinbase also had a hard time this year.

Apple has a more long-term vision for Wallet. When the company unveiled its latest features on Monday, executives said the ultimate goal is a Digital Wallet app that can replace everything in your physical wallet.

But things are going slow in some areas, such as last year’s feature that lets you add your driver’s license, which is only available in a few states in the US and is expected to be available soon. a few more states. Even then, you can only use the ID at TSA checkpoints at an airport in Phoenix. Automakers have also been slow to adopt an iOS feature that lets you store a digital version of your car keys on your phone.

However, Apple told me yesterday that there is little concern about that slow adoption. The hope is that consumer demand drives third parties to adopt the technology.

On the fintech side, however, Apple is building a foundation to boost its payments business by bringing more functionality into its Payments App and Wallet beyond just using an iPhone instead of a credit card to make payments. pay for everything. And because of Apple’s size with over a billion devices in use, there’s going to be a lot more people coming into contact with these products.

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