Apple has a new venture called “Breakout”
Aiming to launch its own payment processing infrastructure
Other targeted in-house tasks include
Risk assessment, fraud analysis, credit checks, and dispute handling
Meta and Google tried to issue financial products directly
But eventually gave up
Apple has avoided issuing financial products directly
It partners with financial companies to serve its users worldwide
Apple partners with CoreCard and Green Dot for payment processing
The news of the Breakout project sent their shares down 10%
Apple has ample resources to be a fierce financial player
However, it doesn’t make sense for it to become a bank
In 2021, the ROE of US banks is 14%
Apple’s ROE is an eye-popping 147%
Apple wants to be a super-connector between banks and consumers
To maintain the high growth with technology and analytics
Recently it purchased an open banking technology company Credit Kudos
Which also has a credit reference agency license and risk decision engine
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