Apple Eyeing Bigger Role In Consumers' Financial Lives, Says Gurman; Why It's A Challenging And Long-Drawn Goal

Zinger Key Points
  • Apple's Pay Later service could be rolled out to public by March or April: Gurman
  • The columnist sees financial services expansion as one of Apple's biggest opportunities.

Apple, Inc.’s AAPL expansion into financial services is one of the company’s biggest opportunities but the most challenging as well, Bloomberg columnist Mark Gurman said in his weekly “Power On” newsletter.

What Happened: Apple’s new initiatives in fintech have faced engineering and technical setbacks, resulting in slow progress and delays, Gurman said,

He noted that two new features, namely a service similar to “buy now, pay later” and a savings account program tied to the Wallet app, have overshot the launch deadline. Two other yet-to-be-announced fintech initiatives – an iPhone hardware subscription program and an expanded version of the “Pay Later” program called “Apple Pay Monthly Installments” have also slowed, he added.

“It’s clear that the financial push has proven more difficult than expected,” Gurman said.

“I believe the delays to all four initiatives stem from engineering challenges, as well as work on a next-generation financial system that will support them,” he added.

See also: Everything You Need To Know About Apple Stock

Apple Takes Small Strides: Gurman said there have been recent signs of progress. Apple is prepping to release the first version of the “Apple Pay Later” to consumers, he said, citing the company began testing it with its corporate employees several weeks ago and with retail employees earlier this month.

The columnist noted that Cupertino followed a similar procedure with Apple Card in 2019, providing it to retail staff about a month before the public release. “Apple also informed retail employees that Pay Later loans would require soft credit checks that don’t affect credit scores — in line with other 'buy now, pay later' services,” he added.

Gurman expects the feature to go public by March or April. The company will likely wait to see how the initial version of “Pay Later” performs before expanding it to higher transaction amounts. The service will rely on an in-house lending subsidiary before Apple launches a more extensive offering with partners and interest rates, he added.

Apple’s savings account hasn’t seen much progress after the company added underlying code to support the feature in iOS 16.1 in 2022 and partner Goldman Sachs published its fine print for the service in December, the Apple writer said. He also noted that the international Apple Card expansion, another key component of the financial strategy, hasn’t happened even after three years of its launch.

Gurman, however, noted headway in other areas, including the campaign for digital drivers licenses and expansion of Apple Pay to much of the globe and the recent enabling of tap-to-pay support for small businesses.

“Apple remains determined to have a bigger role in consumers’ financial lives. It just may be a long time coming,” he added.

Apple shares closed Friday’s session up 0.25% at $151.01, according to Benzinga Pro data.

Read next: Apple Has 3 Massive Growth Opportunities With 'Another Decade Of Solid Performance,' Analyst Says

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