Apple could become your next bank

The tech giant has everything it needs, including more than a half-billion credit cards on file, to put an iBuck in your pocket.

By TheStreet Staff Jun 13, 2013 3:09PM

thestreet logoThe Apple Inc. logo is displayed on the back of the new MacBook Pro David Paul Morris, Bloomberg via Getty ImagesBy Robert Weinstein

 

Apple (AAPL) may well become your next bank -- and that's not as surprising as it might seem. Sears (SHLD) stepped into the banking industry from consumer retail in the 1980s with its Discover Card (DFS), before selling Discover to Morgan Stanley (MS) 12 years later.


Discover revolutionized credit cards at the time. Its card didn't have an annual fee, and it set the pace for reward cards. I remember when Visa (V), Master Card (MA) and American Express (AXP) were not welcome at Sam's Club (WMT), and if you wanted to use a credit card, you pulled out a Discover card.


I would have used a Discover card anyway, because I wanted to earn the much-hyped "2% cash back." Reward cards have come a long way since, and the primary card I now use is from Capital One (COF), because of its great points program.


Apple has the money, technology, critical mass of customers and ambition to change the face of banking and payment processing. TheStreet's Chris Ciaccia noted in an article that Apple has more than 500 million credit card users on file. He went on to write that Apple was recently granted a patent for managing credit through a mobile device.


You don't have to connect many dots to achieve the same conclusion as TheStreet's Richard Saintvilus that Apple is becoming a major disrupter in banking and payment processing. The only question is by how much and what it means to shareholders.


With Apple's global reach through mobile devices, another payment form on the scale of Amazon (AMZN) is not only possible, but moves beyond the borders of the Internet and into the retail world. In fact, as Apple payment methods move beyond national borders, they could make buying and selling foreign currencies a thing of the past, much as the Euro has.


The iBuck could become the most popular payment method, both on-line and retail. It's a small step into consumer finance. eBay (EBAY) through PayPal and GE's (GE) GE Capital may soon face a new market entrant for consumer interest collection. I can envision a day soon when a car buyer is reviewing financing at the auto dealer's and instead decides to use iLoan to finance the vehicle through Apple.

 

Apple short-sellers be warned: The office located at 1 Infinite Loop has everything needed to continue growing and delivering shareholder value in ways you haven't even thought about yet.

 

At the time of publication, the author held no positions in stocks mentioned.

 

 

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