Apple continues to move deeper into the fintech space, announcing last week that it will launch interest-bearing savings accounts.
According to Apple, users of the new savings account will be able to deposit daily cash-back rewards automatically into high-yield savings accounts administered by Goldman Sachs. The accounts are primarily accessed through the iPhone’s Wallet app.
Also powering Apple’s credit card, Goldman Sachs has been struggling with Marcus, its own consumer business, so supporting savings accounts for the roughly 50 million Apple Pay users in the U.S. could be an attractive distribution opportunity, Max Friedrich, ARK Venture committee member and analyst, wrote in an ARK Invest newsletter on October 17.
“For Apple, we believe a savings account could increase the stickiness of its ecosystem, making users even more dependent on its primary revenue driver, the iPhone,” Friedrich wrote.
Earlier this year, the company announced Pay Later, a feature enabling Apple Pay users to pay for purchases in four installments over six weeks, like the buy-now-pay-later (BNPL) offerings from Klarna, Afterpay, and Affirm, according to Friedrich. Reportedly, technical and engineering issues have delayed Pay Later until 2023.
Square –– Block’s seller business –– announced in June that it will integrate with Apple’s new Tap-to-Pay feature, allowing merchants to accept contactless payments using its point-of-sale iPhone app and providing “new commerce experiences” such as serving customers on the spot and accepting contactless payments on the go.
Investors looking for opportunities to add exposure to financial technology innovation should consider the ARK Fintech Innovation ETF (ARKF), an actively managed fund.
ARK defines “fintech innovation” as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works, which ARK believes includes but is not limited to the following business platforms: transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer-facing platforms, and new intermediaries.
ARKF launched in late 2019 and has garnered $757 million in assets under management.
For more news, information, and strategy, visit the Disruptive Technology Channel.