Apple acquires fintech startup Credit Kudos as it pushes deeper into payments

Apple has acquired UK-based fintech startup Credit Kudos as it looks to push deeper into the payment sector.

Credit Kudos utilises machine learning to create an alternative to traditional credit scores, which could suggest that the US tech giant is seeking to expand into the lending space.

Apple already offers a credit card, which is only available in the US in partnership Goldman Sachs.

It also offers payment instalment plans for its devices.

The banking industry had previously express concerns that Apple was going to steamroll into the financial sector in 2014 after the launch of Apple Pay, however the approach has been more cautious.

Rumours have circulated around Apple planning to introduce a buy now, pay later (BNPL) product similar to companies including Klarna, PayPal and Afterpay.

Credit Kudos acquisition could provide Apple with the functionality to do so, according to fintech consultancy 11:FS chief product officer Simon Taylor.

“Instead of forcing consumers to do a full credit pull just to buy a $50 jacket, why not quickly check their affordability and creditworthiness directly from their bank account?,” he told the Financial Times.

At the moment, Credit Kudos does not have a UK banking license, however it takes advantage of the country’s Open Banking standards.

These standards are designed to make it easier and safer for consumers to share selected financial information from bank accounts and credit cards with smaller service providers.

Credit Kudos raised $5 million in 2020 in a funding round which was led by Albion VC.

The firm looks to make affordable credit more widely available to customers and give faster lending decisions, similar to the soft credit checks that are performed by the BNPL leaders.

Apple has invested in several UK firms in the past few years which has included audio-recognition company Shazam, speech-tech company VocalIQ, imaging start-up Spectral Edge and certain units of chipmaker Dialog Semiconductor.

It rarely purchases larger companies and instead focusses on acquiring firms that can accelerate development of newer features on its flagship product, the iPhone.

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