" class="no-js "lang="en-US"> EXCLUSIVE: Is Apple’s Digital ID Card Feature Another Step To Becoming A Bank?
Thursday, March 28, 2024

EXCLUSIVE: Is Apple’s Digital ID Card Feature Another Step To Becoming A Bank?

It is undeniable that companies like Apple have established a large print on the lives of global society. We have iPhones, iPads, AirPods and various products at every glance. Recently, it was announced that Apple is planning to turn iPhones into digital identification cards in American states. Whilst this typifies the expansive power of Apple with regards to capturing a digital identity (from ApplePay to biometric fingerprint recognition systems), it begs the question; is this the next step down a potential path to becoming a bank?

There is a push around the world to embrace digital identity systems, that is for sure. But more often this is enforced at the national level, rather than through private companies. Apple, according to confidential documents recently obtained by CNBC, is requiring US states to foot part of the bill and provide customer support for this new venture of transforming iPhones into digital identification cards. This means that states will have to allocate reasonably sufficient personnel and resources’ to issue and service credentials, employ specialist project managers who can deal with Apple inquiries and enforce the systemic adoption of Apple services. On the surface, this uniformity may sound like convenience, yet with it all occurring at the taxpayer’s expense, is this ceding of control actually beneficial, signs of a dystopian future of surveillance, or part of potential plans for Apple to become a bank?

A Big Deal For Accessibility – Georgia and Arizona have been named as the first states who will offer driver licenses on Apple’s Wallet app, but have not yet launched their programs. Four other states have signed up to Apple’s digital ID program too, including Connecticut, Iowa, Maryland and Utah, all of which are forward-thinking regarding safer state modernization and accessibility. ‘The addition of driver’s licenses and state IDs to Apple Wallet is an important step in our vision of replacing the physical wallet with a secure and easy-to-use mobile wallet,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet. “We are excited that the TSA and so many states are already on board to help bring this to life for travelers across the country using only their iPhone and Apple Watch, and we are already in discussions with many more states as we’re working to offer this nationwide in the future.’

All of this results in one clear result – Apple becomes even more essential than ever. Daring Fireball’s John Gruber has detailed a clear and useful overview for further details and intricacies regarding how this new feature will work, especially with Touch ID. Apple describes the ID feature as ‘an easy, fast, and more secure way for people to present their driver’s license or state ID using their iPhone or Apple Watch.’

Will Our Future Be One Banked By Apple? – Embedded finance and invisible payments are a classic feature of Apple’s brilliance, and this new digital identity further reinforces this. However, is this evidence of Apple looking to become the next big bank?

This month saw Revolut, the financial ‘superapp’ with more than 16 million customers worldwide, announce it will bring Apple Pay to Revolut Junior customers across the UK and EEA. The introduction of Apple Pay is Revolut’s answer to the feedback received over the last few months from their customers, and specifically parents and their teenage children. Contactless payments especially cater to teenagers, who will now be able to make quick and hassle-free payments from their Junior account using their iPhone or Apple Watch. There’s a clear expansion into extending their financial services into genuine banking services. Combined with further forms of personal identity registered on Apple platforms, it wouldn’t be a surprise if they were to further their power.

Earlier this year too, Apple and Goldman Sachs revealed their BNPL service, dubbed internally ‘Apple Pay Later’ to rival offerings serviced from other organisations such as PayPal Holdings Inc. In this partnership, Goldman Sachs acts as the lender for loans, as the system looks to nudge more people to pay for items using their iPhones, rather than their standard debit/credit cards. The plan will allow users the option to either pay for the item across four interest-free payments made every two weeks, or across several months with interest.

Users of the ‘Apple Pay Later service’ will need to be approved by submitting an application through the iPhone’s Wallet app, where they will also be able to manage their payments. This further shows the consolidation of financial history and activity through Apple. Their payment services are already accepted by 85% of all US retailers. If Apple continues to normalise themselves in these different realms of society, I wouldn’t be surprised if they become the next big bank, especially when it’s unfolding in front of our eyes.

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