On the Road to Open Banking
Apple is testing out a new feature for UK Apple Wallet users, allowing them to view their current bank account balance and transaction history directly within the app.
The tech giant is leveraging UK’s Open Banking API to fuel the effort, and according to 9 to 5 Mac, the feature will be available to a select group of Wallet users who have linked their Apple Pay card with one of the participating banks, which include Barclays, HSBC, Lloyds, RBS, Monzo, and Starling.
Transparency Around Finances
Apple’s move into open banking expands the capabilities of its Apple Wallet app beyond just facilitating digital payments. Open banking will allow users to monitor their financial activities and make more informed spending decisions by displaying their balances and knowing—in real-time—how much money they have in their account without having to open up their separate banking app.
This integration is a significant development for digital wallets, Apple, and open banking. Here’s why:
Digital wallets: This move enhances the functionality of digital wallets, making them more than just a tool for digital payments. By showing current account balances and transaction history, digital wallets are evolving into comprehensive financial management tools. This could lead to increased adoption and usage of digital wallets.
Apple: For Apple, this is a strategic move to increase the utility of both Apple Wallet and Apple Pay—potentially driving more users towards their ecosystem. It also positions Apple as a pioneer in leveraging open banking APIs for enhancing user experience.
Open banking: This is a validation of the open banking concept, which advocates for sharing of user-permitted data via APIs to provide better financial services. Successful integration could encourage other regions to adopt similar standards.
Future Integrations
Apple’s open banking pilot program is currently only available in the UK due to its established open banking standard that allows for such integrations. The introduction of a similar feature in other regions, including the U.S., may face challenges due to the absence of comparable standards.
That said, this may changing soon.
In a recent report, “Why Data Isn’t A Zero-Sum Game in Payments,” Matthew Gaughan, Payments Analyst at Javelin Strategy & Research, outlined how upcoming regulations will turbocharge open banking in the U.S.
The Consumer Financial Protection Bureau is working on a standardized rules framework ensuring that consumers can access their data uniformly, regardless of the data provider. If successful, this would pave the way for Apple to offer a similar service in the U.S.
