Apple Savings and the Emerging Personal Payment Stack

Apple has launched a Savings account attached to Apple Card, delivered through the Apple Wallet app. From a payments perspective, Savings represents a new attempt at traditional bank cross-selling — one that uses payment functionality as the top of the customer acquisition funnel rather than the financial institution that offers the payments features. An Apple Wallet/Pay-centric approach restricted to users of Apple devices limits the reach of the Apple financial ecosystem to the admittedly large and attractive customer base of Apple devices. Future success for Apple’s strategy rests on two pillars: 1) continued growth and retained adoption of Apple Wallet, which is contingent on 2) Apple’s retaining the ability to restrict access to the near-field communication chip in phone and watch devices.

Should Apple succeed at using Pay to drive customers into other financial products such as Card, Savings, and Pay, it could emerge as a personal payment stack service provider, distributing a full suite of financial products and leveraging the broader Apple relationship to deliver additional value to consumers.

Key questions discussed in this report:

• Can the launch of Savings position Apple to offer a full personal payment stack service?
• Does Apple’s suite of financial services pose a threat to traditional banks?
• What limits does Apple face in realizing its ambitions in financial services?

Companies Mentioned:

Apple, Huntington Bank, Paze/Early Warning Systems