Reports have emerged that Apple [AAPL] has acquired UK fintech company Credit Kudos. The deal supposedly closed earlier this week for a reported $150m.
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What does Credit Kudos do?
Credit Kudos is an open banking startup that claims to offer a more robust picture of an individual’s financial health than typical assessments do. This offers individuals better access to credit, through a more rounded view of their financial history, and also helps financial institutions make quicker and more intelligent decisions about loans.
Why does this matter to Apple investors?
Apple’s plans for Credit Kudos are distinctly unclear at this early stage. Its typical company line stating that the big tech firm “buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans” rings very true in this case.
Some have speculated that this is the first real step in Apple attempting to bring its highly successful Apple Card to the UK market. The card launched in the US in 2019 in collaboration with Goldman Sachs and offers some very popular cash back incentives to consumers.
If this is indeed Apple’s plan, however, consumers shouldn’t get their hopes up about the company matching those types of incentives on this side of the Atlantic. Apple’s cash rewards are a direct result of the relatively high interchange fees on card payments in the US. The UK — and Europe for that matter — has these fees capped extremely low by comparison. This would leave Apple with an extremely low margin with which to offer cashback rewards.
Regardless, this purchase is still quite an intriguing one. Apple’s previous forays into financial services through its Apple Card and Apple Pay have both been successful, so expanding these through further innovation or by exposure to new markets could benefit both the company and its shareholders in kind.
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