Apple Launches a Neo-Bank: Does it Pose a Threat to High-Risk Payment Systems
Representatives of Apple have announced the launch of a neo-bank in collaboration with the investment firm Goldman Sachs. A high-risk payment systems expert from Betatransfer Kassa suggests discussing the specifics and prospects of this neo-bank.
Why Does Apple Need Its Own Neo-Bank?
Large technology companies have long been actively collaborating with financial institutions. For them, this is a way to significantly expand the services offered to customers, while banks gain the opportunity to increase their customer base. There are numerous examples of such collaboration, among the most well-known of them are:
✔ Amazon and JP Morgan Chase;
✔ Alibaba, Kabbage, and Celtic Bank;
✔ Google and Citibank;
✔ Nova Poshta and its neo-bank NovaPay.
Apple has decided to offer its customers the opportunity to open savings accounts with an extraordinarily high interest rate of 4.15% per annum, which is ten times higher than the average in the United States. Furthermore, unlike most traditional banks, Apple does not impose withdrawal limits, and the Federal Deposit Insurance Corporation (FDIC) serves as the deposit guarantor.
Economists argue that the bankruptcy of several major banks announced within a relatively short period has significantly eroded depositors’ trust in traditional financial institutions. In the United States alone, nearly 60% of bank customers have begun to doubt the security of their deposits. Against this backdrop, a neo-bank from the well-known technology giant Apple inspires much greater confidence.
In this way, Apple is increasing interest in its brand, expanding its range of services, strengthening its own Apple Card service, and taking initial steps to capture a share of the financial sector. Meanwhile, Goldman Sachs gains access to Apple’s customer base through this deal.
To compete with traditional banks, the tech giant has offered future depositors much more favorable terms. Consequently, bank customers may start withdrawing their money en masse to entrust it to a familiar brand. This could lead to the bankruptcy of many companies, including those that provide services to high-risk businesses.
To compete with traditional banks, the tech giant has offered future depositors much more favorable terms. Consequently, bank customers may start withdrawing their money en masse to entrust it to a familiar brand. This could lead to the bankruptcy of many companies, including those that provide services to high-risk businesses.
Therefore, it’s worth considering now that your high-risk payment system isn’t dependent on the influence of new neo-banks. Soon more tech giants will start offering financial services to their customers. For instance, they could introduce innovative technological products that simplify payment processes and leverage their existing infrastructure to explore new market segments. Want to secure your business? Connect with Betatransfer’s payment solution right away.
