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  • Frank Tian

iPhone as iPOS, not iBank

Apple is introducing Tap to Pay in the US.

Holders can tap iPhones to make/accept payments.


This aims to expand the payment use scenarios.

Even with most merchants accepting Apple Pay,

It was reported only 6% of iPhone users use Apple Pay in-store.


In addition to the transaction fee,

Increased usage cases will help iPhone sales,

That is the self-propelled ecosystem Apple is after.


Apple so far is quite disciplined in finance,

Not getting into deposit and lending directly.


Google attempted checking accounts,

Then abandoned the plan to focus on cloud business.


Facebook tried the global coin Libra then watered down Diem.

Eventually gave up under regulatory pressure.


Apple lets its bank partners handle the lending.

Previous Barclay, now Goldman Sachs.


Deposit/lending is heavily regulated.

Big techs can better use their money elsewhere.


In 2021, the ROE of US banks climbed to 14%.

This is better than the pre-COVID 11%.


In 2021, Apple achieved an eye-popping ROE of 147%.

Even back in 2019, that sat at 56%.


*Source of graph:

The Fed's Nov 2021 Supervision and Regulation Report


*Consumer credit book, courses, newsletter: https://www.franktian.net


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