Apple is playing a complex game of chess with its new payment features — and it has a lot of moving pieces on the board.
The announcement of an upcoming savings account comes just after the Cupertino, California, tech giant delayed its
Apple is working with Goldman Sachs to launch a high-yield savings account that will connect seamlessly to its existing Apple Card issued by Goldman and the virtual reloadable debit card operated by Green Dot Bank.
Apple Card users get a percentage of their spending deposited to the stored-value Apple Cash account every day. When the savings account launches, Apple Card users will instead be able to direct their Daily Cash rewards into that account where it would earn interest.
Unlike many banks that use checking accounts as the basis of a consumer relationship, Apple is putting its credit card at the core of a growing range of financial services while mostly sticking to the basic premise of transforming the iPhone into a device that makes and receives payments. The more users spend on Apple Card, the more Daily Cash they get in the savings account.
The savings account could also play into Apple's plan for its BNPL offering, Apple Pay Later, by demonstrating that the user has a balance available to repay the installment loan.
"It looks like it was a strategic move to announce the coming of a savings account before rolling out Apple Pay Later, because these features will work seamlessly together," said Richard Crone, a principal with Crone Consulting.
The savings account, which Apple said will be available in "coming months," may also be an attractive option for merchants that use Apple's
"Micromerchants and sole proprietors will also likely be tempted to open an Apple savings account to put their balances right into a high-earning account," Crone said.
Apple is capitalizing on the popularity of cash-back rewards at a time when inflation is pinching consumers' budgets and other types of rewards that credit card issuers offer — such as airline miles — may be losing their luster.
"Banks have their work cut out keeping up with Apple's cash-back rewards strategy here, because consumers want direct access to cash and this is going to be a fast way to build up value versus other types of rewards that in some cases — like airline points — may be losing value with the current inflation rate," Crone said.
Apple is also taking direct aim at companies like PayPal that are attempting to build super apps by combining savings accounts with shopping platforms studded with proprietary deals meant to create a complete financial system within the app.
PayPal last year announced its own high-yield savings account within its app. The PayPal Savings account is a Synchrony Bank account that currently offers a 2.45% APR, which PayPal claims is 14 times the national average.
Apple has not said when its savings account will go live or what interest rate it will offer, other than to describe it as "high yield." Currently Goldman Sachs's high-yield Marcus savings account has a 2.15% APR.
Apple offers 2% cash back on any purchase made via Apple Pay and 3% cash back on purchases with merchants including Apple, Uber and Uber Eats, Walgreens, ExxonMobil and Ace Hardware, among others, and 1% on all other purchases.
A growing number of merchants are also using banking-as-a-service models to create unique new rewards programs leveraging financial services.
Uber last week announced the
"With more fintechs and merchants bundling banking services into their platforms, Apple is taking things to a new level by embedding a powerful combination of financial services features with rewards into the Apple Wallet, which already has more than 510 million users," Crone said.
