The foray into financial services has been one of Apple’s biggest growth opportunities, but it’s also one of its most challenging: The company’s new projects in the financial industry face engineering and technical challenges that have forced it to slow down and fail to timely delivery.
The tech giant has announced at least two new features over the past eight months: a “buy now, pay later” service and a savings account tied to its wallet app. The former, called Apple Pay Later, was announced in June last year and was originally planned to be released in September last year. The latter was announced in October last year, with an official launch planned for a few weeks later.
In addition, there are two financial projects that have not yet been officially announced. One is an iPhone hardware subscription project, and the other is an extension of the Pay Later project called “Apple Pay Monthly Installment”-the latter can handle larger and longer installments, but charges a certain amount of interest.
Apple is continuing to push these services forward, but it’s clear that financial services are harder to develop than they thought. Industry insiders believe that the delays in these four projects are mainly due to engineering challenges and the support systems required for the next generation of financial systems.
Creating this underlying platform is one of the most ambitious parts of Apple’s financial project. It was previously reported that Apple has deployed a project called “Project Breakout” to this end, hoping to develop its own technology to handle interest calculations, rewards, credit checks, approvals and transaction history – all of which are currently handled by partners.
But recently there have been some dawns. After months of delays, the company is preparing to release the first version of Apple Pay Later to consumers. They began testing the feature with corporate employees a few weeks ago and began testing it with retail employees earlier this month. According to this calculation, Apple’s testers have reached tens of thousands.
In a memo sent to retail employees, Apple said employees participating in beta testing were not allowed to take screenshots or confirm the feature’s existence. Not only that, it is not even allowed to talk about it with anyone inside or outside. “Participation in the testing of this feature is subject to a non-disclosure agreement agreed to when signing an employment agreement with Apple,” the company said.
Apple adopted a similar testing process for the Apple Card in 2019, testing it with retail employees a month before its official release.
Pay Later’s testing does not include Hawaii, Montana, Nevada, New Mexico, North Carolina, Wisconsin. Apple’s flagship store in Towson, Maryland, which is unionized, was also not eligible for the test, it is reported. The company stopped issuing the latest benefits to the store employees last year, which caused dissatisfaction.
Apple also notified retail employees that Pay Later loans to require a soft credit check that doesn’t impact credit scores, the same as other “buy now, pay later” services.
Given that retail beta testing just started last week, expect the feature to be officially released in March or April. The service is not tied to releases such as iOS 16.4, but it can be obtained directly through the upgrade of the iOS 16.3 system.
Industry insiders believe that Apple hopes to observe the performance of Pay later through testing, and then make it available to more people, so as to meet greater transaction volume. The service will be provided through an internal lending subsidiary.
There are also savings accounts. When Apple announced the feature last October, they said the service would be available “in the coming months.”
At the time, everything seemed to be going well: Apple quickly added the underlying code to support the feature in iOS 16.1 and partnered with Goldman Sachs to release detailed instructions for the service in December. But since then, Apple and Goldman Sachs have kept quiet about it.
As for the iPhone subscription service, the original plan was to launch in 2002 or 2023. Industry insiders had previously expected that the service might be released alongside last year’s iPhone 14, but it didn’t end up being unveiled. But Apple may still be developing the service, and as long as it makes it easier for users to use increasingly expensive iPhones, it makes a lot of sense for Apple.
Progress on the last important piece of the puzzle on Apple’s financial strategy map has been extremely slow: the international expansion of Apple Card. The card was released in March 2019, but three years later, it’s still only available in the US.
Fortunately, progress in other areas is relatively smooth. Apple’s digital driver’s license is rolling out, albeit a bit slowly. Apple Pay is also already available in many international markets (the service will soon be available in South Korea). Apple also recently added support for tap and pay for small businesses.
It’s not hard to see that Apple still wants to play a bigger role in consumers’ financial lives, but it may take a long time to achieve this ambitious goal.
