Apple’s Project ‘Breakout’: Developing Technology to Enable in-House Processing for Future Financial Products

BY Chandraveer Mathur

Published 30 Mar 2022

Apple Pay Unsplash

Apple is already on the road to self-reliance in silicon with its M1 chips. Now, a report claims it could also reduce its dependency on external partners to develop financial products in the future. As the first step in that direction, Apple is said to be working on developing its own payment processing technology.

Bloomberg’s Mark Gurman reports that Apple’s new project dubbed “Breakout” revolves around developing a framework to process a wide variety of financial tasks in-house. The project has reportedly been named as such because Apple plans to break away from the shackles of the existing financial system. The information Gurman obtained from anonymous sources familiar with the matter suggests Apple is developing technology for payment processing, lending risk assessment, fraud analysis, credit checks, and dispute resolution. The project has

Presently, The Big Tech firm’s financial offerings such as Apple Pay, Apple Card, and the Wallet app use the services of a firm called CoreCard for processing transactions and relaying details to banks. Meanwhile, Apple’s credit card relies on Goldman Sachs for lending, customer service, payment records, and credit checks. Apple is also associated with Citizens Bank for the iPhone Upgrade Program. Ties with these companies are expected to remain unchanged for now, but project Breakout will see future Apple financial offerings use proprietary systems.

Internally, Apple hopes to use its own systems for the first time when it launches a “buy now, pay later” scheme dubbed “Apple Pay Later.” The system will reportedly offer a way to split the outstanding payment into four chunks through “Apple Pay 4,” while long-term installment options will be offered through “Apple Pay Monthly Installments.” Even though the company hopes to use its own processing technology for most of these services, Goldman Sachs is expected to be a partner for the long-term installment scheme.

The iPhone maker could also use its own systems for the subscription-style purchase model it is said to be working on for hardware. However, Apple won’t be diving head-first into the ice-cold waters of financial risk and bad debt. Gurman says the brand could offer limited payment options initially, such as debit cards. Moreover, the brand could also factor in the customer’s Apple purchase history and App Store credit card transaction history.

The ride so far hasn’t been easy, and Gurman reports Apple has faced some hurdles. It is also possible Apple shelves the plans temporarily. How do you think these changes would affect consumers? Tell us in the comments section below.

[Via Bloomberg]