Apple Bank here we come

Great post by Aki Ranin, COO at Bambu worth sharing……

At the annual developer conference WWDC, Apple announced their next move into the world of Financial Services. If you thought Apple Pay was as far as they would go, you were mistaken. Sorely mistaken!

Enter the “Apple Pay Cash Card”

According to the limited information available, Apple will automatically issue a virtual payment card to all iOS users, allowing them to receive and hold money in Apple Wallet.

Pause. Let that statement sink in.

Read it again.

This isn’t your weird cousin’s Google Wallet

This isn’t Venmo. Or even Paypal. We aren’t linking up accounts and plastic cards here. We are issuing cards. Virtual cards. To all iOS users.

One billion iOS users. One billion new cards.

Apple cards, in Apple Wallet, with Apple Pay.

Apple is brutal in implementing its closed ecosystem strategy of always owning the full stack. It rarely leaves space for middlemen, and anyone left kicking pays big time to participate. Banks paid millions in “marketing fees” just to get on Apple Pay.

Want to receive money? Buy an iPhone.

This development conveniently closes the loop on Apple Pay. You can naturally use your Apple Wallet money to pay for anything, with a flick of the Apple Watch on your wrist. Same for online purchases with the recent introduction of Apple Pay for websites. All you need is Apple Dollars now. Don’t tempt them.

Does this make Apple the world’s biggest financial institution?

How much cash will Apple be holding in users wallets in one year? Will nine zeros be enough? Ten? Twelve? That’s a trillion. Only Apple makes numbers like that seem feasible.

Customer acquisition cost for one billion accounts? $0. How do you like them Apples?

How soon will they start to pay interest? What about something like Apple Wealth? The scale and impact really boggle the mind. We are breaking new ground here. Only WeChat and Alipay are operating on this scale, but let’s face it, they are still one trick ponies operating in a single market.

Who can compete with them at this point? Facebook has no hardware. Google is too open to achieve this level of integration. Maybe Amazon…?

Venmo, you’re out.

Paypal, watch out.

Banks, freak out.

Nolan Heiter, Senior Solutions Engineer, VSoft added:  Apple will be hugely disruptive until the government makes them follow all of the same rules and wear the same handcuffs that banks do. But until then, Apple has an opportunity to be one of the biggest players in the payments business. Just remember that deposits are liabilities for banks. Loans are assets. When the banks really need to worry is when we see the iLoan and iMortgage.”

Banks are at risk. The cost profile of entrants like Apple, Samsung, Amazon and Rakuten will be so low that if they ever get a bank charter, the entire landscape will change.