Apple Shakes Up Payments Industry with In-House Move


Tuesday, May 3rd, 2022

It’s been nearly eight years since Apple Inc. launched its very successful Apple Pay mobile-payment service. Fast forward to today, the giant recently announced its decision to bring things closer to home – a move that will most certainly shake things up for the rest of the payments industry.

Calif.-based Apple shared its intentions to bring some of its payment processing and financial-services operations in-house once again. So far, the company has not offered any comment on the move first announced a month ago. Apple offered a simple statement instead.

“Developing its own payment processing technology and infrastructure for future financial products, part of an ambitious effort that would reduce its reliance on outside partners over time.” So far, the company has not revealed the sources it cited within the report.

This so-called project has been dubbed “Breakout” and will affect many different operations, including payment processing, credit checks, credit card risk assessment, fraud control, and some customer-service functions like dispute resolution. 

According to the latest updates on the move by Blomberg, the project is more focused on future products and services than existing ones. Apple’s current lineup includes Apple Pay, Apple Card, and Apple Cash – all very successful in their own right. The biggest concern right now is for the company’s suppliers.

Because Apple is such a major player in payments, this move in-house will have a big impact on its suppliers. The list includes Goldman Sachs, Norcross, CoreCard Corp., and Texas City. (CoreCard recently changed its name in December from Intelligent Systems Corp.) With Apple not revealing any details or plans, suppliers have also been left in the dark.

Tom Noyes, a managing partner of StarPoint LLP, an N.C.-based strategic advisory firm to payments companies, shared that “to say we don’t have a complete picture is an understatement.”

Noyes went on to share that he does not believe Apple will make changes that disrupt Apple Pay or Apple Card. Those ventures have been “an amazing success”, in his words. “They have done a great job of making payments work for them.”

Rather, this move is a strategic one, and it simply highlights the core of the company people have forgotten. According to an unnamed source, Apple pays approximately $400 million a year in interchange. Meanwhile, Apple is a major merchant. This huge expense has given the company a huge incentive to rein itself in and take control of its payment operations.

In light of that, Noyes notes that it makes perfect sense that “Apple wants to own the processes by which their core businesses run.”