Apple Doesn’t Care About Retail Payments.

Last week on our episode of Money20/20 Hindsight, Micky Tesfaye and I unpacked the rather shocking losses that Goldman Sachs consumer unit had made since 2020 – $3 billion. Of these, a third were attributed to the co-branded (but not really) Apple Card that launched in 2019.?

Sugarcoating what was the elephant in the room, Goldman CEO? David Solomon called its partnership with Apple "the most successful credit launch ever". I guess with the emphasis being on the “launch” bit of the quote.?

On the other side of the world, we also discussed a new initiative –? the PBOC announced the launch of a new function on its digital app, to allow Android NFC users to make offline digital payments. The new feature allows customers of the yuan payment application to continue to make offline transactions while using the central bank digital currency (CBDC) from their Android NFC smartphone or device, even if it has no power at that specific moment.?

Note the conspicuous absence of Apple in this announcement. While Android devices dominate the market with a 71% penetration of all smartphones, iOS represents a not trivial 28%. In absolute numbers, that's around 254 million Apple devices left out of the PBOC initiative.?

So, is Apple losing its fintech mojo??

It depends on how you look at it. While the Apple Card has been, ahem, a bit disappointing, Apple Pay has done rather well, with three-quarters of iPhone users doing contactless payments, up from half in 2020 (thanks, COVID).? But that isn’t payments any more than a leather wallet is. It’s a receptacle that provides the connective tissue between the consumer and the merchant, nothing else. Apple has been famously coy about opening up its digital wallet to third parties, which I guess is why they’re fine not being a guest at the PBOC CBDC party (apologies for the acronym yard sale).?

For banks, payment networks, fintechs, retailers, and pretty much anyone else in the incumbent financial services industry, this is probably good news. Big tech has been the boogeyman in the room for a long time, a John Wick that could swing by at any moment to destroy you and your revenue streams. But thus far, the collective of Apple, Google, Amazon, and Facebook have bigger puppy killers to deal with and frankly don’t seem that interested in something as pithy as retail payments.?

For Apple in particular, payments are a feature, not a business case. And that’s probably just fine for them - you do the legwork and we get the halo effect and the POS branding.