Apple has set up a wholly-owned subsidiary to provide its own financial services. Instead of using Goldman Sachs or other banks to make credit decisions or issue loans, Apple provides loans to consumers through its wholly-owned subsidiaries. Apple has set up a wholly-owned subsidiary to provide its own financial services.

Apple has set up a wholly-owned subsidiary to provide its own financial services. 1 As Apple further enters the financial services industry, the company will handle loans for its newly launched "buy first and pay later" service, and will no longer rely on partners.

A wholly-owned subsidiary of Apple will be responsible for the credit check of Apple Pay later and make a decision on the loan for the service. Apple said that the subsidiary, called Apple Financing LLC, has the government loan license needed to provide this function, but it operates independently of Apple's main company.

This move marks the first time that Apple has dealt with key financial tasks such as loans, risk management and credit evaluation. This is a major change for a company that started by selling computers. So far, Apple's financial services have been supported by third-party credit processing institutions and banks. For example, Apple Card relies on Goldman Sachs Group for loan and credit evaluation.

Now, Goldman Sachs has maintained a small role in Apple's new projects. This financial company is the issuer of MasterCard payment voucher, which is used to complete the purchase of Apple Pay in the later period. Apple Financial Company does not have its own banking license.

According to a report in March this year, as part of a secret plan called Breakout, Apple has been trying to transfer many elements of its financial services to the company. In addition to loans, credit checks and decision-making, Apple is also developing its own payment processing engine, which will eventually replace CoreCard. Apple is also developing new customer service features, fraud analysis, tools for calculating interest and other service rewards.

Apple has set up a wholly-owned subsidiary to provide its own financial services. Apple, the global technology giant, is taking the biggest step to the financial industry so far.

It is reported that Apple's recently launched "Apple Pay Later" service will bypass banks and provide loans directly to consumers.

On Monday, Apple announced the launch of the Apple Pay Later service, which will allow iPhone and Mac users in the United States to pay in four installments within six weeks without paying extra interest.

Since Apple does not have the permission to issue payment vouchers directly, Goldman Sachs, which cooperates with Apple to issue Apple Card, will later allow Apple to access MasterCard's network to run Apple Pay.

However, Apple did not use Goldman Sachs or other banks to make credit decisions or issue loans, but provided loans to consumers through its wholly-owned subsidiary, Apple Financing LLC.

Apple explained that part of the reason for providing loans directly to users is to avoid sharing user data with third parties.

Apple said that there is no need to apply for a banking license at present.

Providing loans directly to customers through subsidiaries allows Apple to obtain handling fees from each transaction and strengthen the company's control over data and subsequent expansion plans. Of course, if the customer can't repay, the loss will be borne by Apple itself.

Several technology companies, including Amazon, PayPal, Stripe, Shopify and Block (formerly Square), also provide financing to small businesses selling through their platforms. However, apart from professional financial technology companies such as Klarna and Confirm, few large technology companies directly provide general consumer loans to consumers like Apple.

It is worth mentioning that Apple users usually earn more than users of other technology brands, thus reducing the loan risk.

Apple can also analyze customer data, such as the time of purchasing iPhone or the frequency of purchasing apps from the App Store, to assess customers' reputation.

Apple said that the loan ceiling may be around $65,438+0,000. If Apple Pay Later's loan is not repaid, it will no longer provide credit lines for these users.

Although Apple did not disclose its specific financing mechanism, according to its latest quarterly report, as of the end of March, Apple had a net cash of $73 billion, so it can easily borrow cash.

Apple has set up a wholly-owned subsidiary to provide its own financial services. As Apple further extends its reach to the financial services industry, the technology giant will bypass its partners and handle short-term loans by itself in a new way of "buy first and pay later".

On Wednesday, local time in the United States, Apple announced the establishment of a wholly-owned subsidiary, Apple Financing, which will help verify users' credit information to support Apple's upcoming "Buy First Apple Pay Later" service. Apple financing will be operated separately from the parent company.

This move marks the first time that Apple has launched services such as handling loans, risk management and credit evaluation. This is a major change for a company that started by selling computers. So far, Apple's financial services have been supported by third-party credit processors and banks. For example, Apple Card relies on Goldman Sachs Group for loan and credit evaluation.

Goldman Sachs has only played a small role in the new project. This financial company is the issuer of MasterCard payment voucher, which is used to support the late purchase of Apple Pay. However, Apple Financial does not have its own banking license.

It was reported in March this year that Apple has been trying to transfer its financial services internally, which is an important part of a secret plan called Breakthrough. In addition to loans and credit checks, Apple is also developing its own payment processing engine to eventually replace CoreCard. Apple is also developing new customer service features, fraud analysis and tools to calculate interest and other service returns.

Few companies can match Apple's financial strength. By the end of the first quarter, the company had nearly $200 billion in cash and securities, and made a profit of nearly $95 billion in the last fiscal year. Financial services help keep users in the iPhone ecosystem. To this end, Apple hopes to have greater control over this process, so as to launch new features faster and possibly get more revenue.

At this year's global developer conference, Apple released Apple Pay later, which is part of the iOS 16 operating system, allowing users to pay for Apple Pay transactions four times in six weeks. This project will initially be launched only in the United States, but Apple plans to eventually expand its updated financial services to more regions.

It is reported that Apple is still developing a long-term loan plan called Apple Pay monthly installment. Although Apple Pay will not cooperate with Goldman Sachs or other major partners in the later period, the long-term loan plan may depend on other companies including Goldman Sachs, which may offer different packages and interest rates. In April this year, David Solomon, CEO of Goldman Sachs, said that the company was "very satisfied" with the cooperation with Apple.

Earlier this year, Apple acquired Credit Kudos, a British startup, which used bank data to make loan decisions. It is reported that Apple's internal risk assessment engine will consider the history of consumers as Apple customers, such as whether they often use the payment purchase function, or whether their credit cards have been bound to iTunes or App Store.

In addition to the "buy first and pay later" service, Apple also plans to use its internal loans and technology for the upcoming iPhone hardware subscription plan. However, the company did not immediately give up Goldman Sachs' plan to promote Apple Card alone, nor did it consider cooperating with other banks to support Apple Pay transactions.

Apple's entry into the field of "buy first and pay later" is regarded as a great threat to companies that provide similar services such as Confirm Holdings and Klarna Bank AB. On Tuesday, Max Levchin, CEO of Confirm, said he was not worried about the launch of Apple Pay. He said: "All participants have a lot of room for growth."