> After hovering around record lows for much of the pandemic, consumer delinquencies are rising across the industry.
> It lost slightly more than $1 billion in 2021 and $783 million in 2020, after accounting for operating expenses and money set aside to cover possible losses on loans
That seems like an enormous amount of money to support buy now and pay later
Apple has enough cash reserves to be able to be a bank themselves, but I guess are much too smart to use their own money.
Is the buy now, pay later all of what this stems from? I have never looked into it, but I assumed they were also backing the Apple credit card which I consider totally different from each other.
The retail bank was a mess. It’s a stepping stone for Solomon to disrupt the trading culture and take control of the bank from the investment bank. It costs a lot to set up a retail bank, and the political will was there to start but not to finish. The politics around the retail bank was hyper toxic, with a classic us and them mentality. The established tech and back office were marginalized and the retail bank tried to build it all themselves but learned the hard way very late those groups exist for a reason - regulatory and security bars are super high and can’t be achieved by hubris alone. Apple had extremely aggressive asks of the technical stack, they outsourced a lot of core stuff to SaaS finserv at a high margin, and a bunch of other issues. Finally the timing of it all was awful. They started in a super low rates cash flush world and things have gotten harder everywhere for them.
But Apple could take it to an 11 too. If they finance your equipment and you fall behind on your payments, guess whose equipment just went into lock-out mode... Apple could then allow the device to be returned to an Apple Store, and credit will be applied to the account. A voluntary return policy, only throw in a carrot of if you provide a memory stick, they'll make you a copy of the data for a small nominal fee.
Ford, Chevy, Toyota, Honda, et al. repo cars daily, and their brands are not hurting. People know when they can't make payments that their collateral is likely to be collected.
I'm not saying I'm for them doing this or anything, but just taking the dystopian concept to a logical completion. We've already seen where self driving cars have been discussed repossessing themselves, so this is just the natural extension of the same concept. This forum tends to think that places like FB, Googs, etc should have a very negative brand due to the data collections, but the masses don't give a damn.
What's really shocking is that this number is post provision for future losses, which is a non cash accounting charge that the media often uses to make banks look worse. These are real losses.
> After hovering around record lows for much of the pandemic, consumer delinquencies are rising across the industry.
> It lost slightly more than $1 billion in 2021 and $783 million in 2020, after accounting for operating expenses and money set aside to cover possible losses on loans
That seems like an enormous amount of money to support buy now and pay later