UK Apple Card on the way? Apple buys UK credit check start-up

Britons are wondering when we might see a UK Apple Card since the US launch in 2019. A new report today suggests the company may be laying the groundwork.

Apple has acquired a British start-up that is taking a new approach to assessing the credit worthiness of funding applicants…

The block reports.

Credit Kudos, a UK open banking startup that helps lenders make better decisions, has been acquired by US tech giant Apple.

The deal was completed earlier this week, according to three people familiar with the deal.

Engadget notes that the evidence in this regard seems clear.

One on the Credit Kudos website, which was updated on March 21, notes that the company is a subsidiary of Apple. A link to the privacy policy now redirects to the Apple website.

The block contacted Apple for comment, but had not received a response at the time of writing. However, it’s a safe bet that the iPhone maker will issue its usual boilerplate statement: “Apple buys small tech companies from time to time, and we don’t usually discuss our purpose or plans.”

Credit Kudos claims to offer a better approach to credit checking than conventional agencies.

The startup offers insights and scores on loan seekers drawn from banking data – specifically loan transaction and outcome data – from the UK’s open banking framework. Its API can offer lenders faster decision-making, less risk and increased acceptance rates, according to its website.

However, Brits shouldn’t necessarily be too excited about the prospect of a UK Apple Card. Although the rewards on offer seem generous by UK standards – 2% back on most purchases and 3% with Apple and other selected merchants – they are unlikely to be matched in Britain.

We previously explained the reason for this:

So how can Apple afford to offer cash rewards of between 1% and 3%, depending on how and where you use it?

The answer is through what are called interchange fees. These are fees that card companies charge merchants each time they accept a card payment.

In the United States, interchange fees are relatively high. They usually start at around 0.8% of the transaction plus 15c, and increase to 2.95% plus 20c for certain types of purchases made with “premium” cards. And the Apple Card, although it is available to most people and does not charge any cardholder fees, is classified as a premium card […]

European (including UK) interchange fees for consumer cards are capped at 0.2% for debit cards and 0.3% for credit cards. That’s it. Apple – or its European partner banks – would therefore only have this margin to play. (Higher rates apply to corporate cards.)

As I noted then, Apple could potentially cross-subsidize to offer rewards, but we still shouldn’t expect anything much better than what’s currently available on existing premium cards in the UK.

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