A smartphone (iPhone) is placed at the payment terminal at the checkout counter of a supermarket.
Apple AAPL recently announced the soft launch of a new feature allowing users in the UK to view their current account balance via an integration into their Apple Wallet, powered by Open Banking APIs. While Apple users have long been able to view their bank account balance through the Widgets feature and a simple account balance isn’t sexy, the real excitement comes from what Apple can do in terms of personalization, of contextualization and PFM now that they have exploited Open. Banking APIs.
Where the real excitement lies
The excitement around this launch doesn’t necessarily come from the question of balance, but rather from three “firsts.”
- A BigTech using open banking APIs
- Apple launches feature outside the US first
- A user able to view their integrated account balance at the payment point
As a fintech customer experience advisor, the third point is revolutionary. The obvious benefit of this feature, and perhaps its only benefit, is that it allows users to make a more informed decision when using Apple Pay. With real-time balance built into the 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 nearing their limit and should instead choose to use a debit card. Simple, but impactful. It is also perhaps a stepping stone towards a hardware-based PFM offering.
Apple could be a complete game changer for PFM and payments by leveraging this feature to integrate PFM and payments. For example:
- Use geolocation to personalize and personalize the experience. Imagine a user is abroad and makes a purchase; Apple can see if the user is in the EU or US and will suggest which card to use based on foreign transaction fees. It could evaluate past fee data with Open Banking APIs to determine the average FX fees paid per account and suggest the most profitable card.
- Use geolocation to maximize loyalty rewards. As Professor Markos Zachariadis pointed out in a LinkedIn post, he receives notifications from his Marks and Spencer app every time he is near a store to encourage him to use his loyalty card. But what if Apple knew that the user’s Monzo card offered 3% cash back at Nike (again based on the Open Banking APIs to display past transaction data), determined that the Was the user in a Nike store and suggested paying with their Monzo card?
- Use data to drive better spending behaviors. PFM is great because it can alert users who are out of budget or habitually overspending. However, PFM often looks to the past or the future, but rarely to the present. But what if this information appears in Apple Wallet at the time of purchase? While this would prove a nightmare for BNPL providers and consumer card issuers, it could empower consumers to make positive behavioral changes. They might now think twice before buying their 15th pair of Nike shoes that year in store or at the checkout counter.
All eyes are on Apple
With Apple’s recent foray into integrated finance via its savings, credit card and BNPL products, this is undoubtedly an exciting play and perhaps an indication of Apple’s grand vision. Apple to become the first hardware banking platform without actually being a bank. We are perhaps witnessing the first steps towards Alessandro Hatami’s vision for the Spotify from the bank.