Apple AAPL recently announced the soft launch of a new feature that allows users in the UK to view their current account balance through integration into Apple Wallets, supported via Open Banking APIs. Although Apple users have long been able to view their bank account balances via the Widgets feature, and a simple account balance isn’t appealing, the real excitement comes with what Apple can do around personalization, contextualization, and PFM now that they’re connected to Open Banking APIs.
Where the Real Excitement Lies
The excitement of this launch doesn’t necessarily come from a view of balance, but from three “firsts.”
- A BigTech using open banking APIs
- This is the first time Apple is temporarily making a feature available outside the US
- A user who can view the account balance placed at the payment point
As a customer experience consultant in fintech, the third point is groundbreaking. The obvious and perhaps only benefit of this feature is that it allows users to make a more informed decision when using Apple Pay. With the real-time balance placed in Wallet at the point of purchase, the user can see if they can use their credit card to make the purchase or if they are approaching their limit and choose to use a debit card instead. Simple but effective. It could also perhaps be a stepping stone towards offering hardware-based PFM.
Apple could completely change the PFM and payments game by building on this feature to integrate payments with PFM. For example:
- Using geolocation to personalize and customize the experience. Imagine a user makes a purchase abroad; Apple can see whether the user is in the EU or the US and recommend which card to use based on foreign transaction fees. It can evaluate historical fee data with Open Banking APIs to determine the average foreign exchange fee paid per account and recommend the most cost-effective card.
- Using geolocation to maximize loyalty rewards. As Professor Markos Zachariadis points out LinkedIn After sending the post, he receives notifications from the Marks and Spencer app every time he’s near a store, encouraging him to use his loyalty card. What if Apple knew that the user’s Monzo card gave Nike 3% cash back (again, relying on Open Banking APIs to view historical transaction data), determined that the user was at a Nike store, and suggested they pay with their Monzo card?
- Using data to encourage better spending behavior. PFM is great because it can provide a wake-up call to users who are going off budget or have a habit of overspending. However, PFM often looks to the past or future, but rarely to the present. But what if this information appeared in Apple Wallet at the point of purchase? While this may be a nightmare for consumer BNPL providers and card issuers, it can enable consumers to make positive behavioral changes. They may now think twice about buying that year’s 15th pair of Nike shoes in-store or at the cash register.
All Eyes on Apple
Apple’s recent foray into Embedded Finance through its Savings, Credit Card and BNPL products is undoubtedly an exciting play and perhaps indicative of Apple’s grand vision to become the first hardware-based banking platform without actually being a bank. We may be witnessing the first steps towards Alessandro Hatami’s vision. Spotify of banking.
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