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Implications of Apple Launching a Lucrative Savings Account On Developing Nations
In October 2022, Apple announced that they are launching a savings account paying 4.15% per year, without fees or account balance minimums. This marked a shift in technology towards banking. Previously, technological advancements were felt in the personal computer, the music industry, the mobile phone industry, and the tablet computer industry, and Apple cemented her position as the leading in those industries. This time, Apple has set its eyes on the finance industry. This will be the birth of a massive disruption.
In March 2023, Apple launched Apple Pay Later, a product that allowers consumers to buy on credit in 4 equal installments over 6 weeks with no interest or fees.
As Apple charges forth in the finance space, it is imperative to know the implications of the tech giant’s activity on Africa and other developing economies:
Financial Inclusion will increase: Apple’s savings account could make financial services more accessible to people in developing economies who have traditionally been excluded from the financial system. By offering a digital savings account, Apple could reach people who don’t have access to traditional banking services, allowing them to save money and participate in the economy. All they would need is an Apple phone and good internet access.
Increased competition: Apple’s entry into the savings account market could create competition among traditional banks, potentially leading to better interest rates and fees for consumers. In Kenya for instance, commercial banks offer interest on dollar deposits on average of about 2 to 3% per year.
Increased savings: By offering a high-interest rate, Apple’s savings account could incentivize people to save more money, which could have positive effects on the economy as a whole. Higher savings rates could lead to increased investment and economic growth.
Potential currency impacts: If Apple’s savings account is denominated in a foreign currency, it could have an impact on the local currency. If people start saving in a foreign currency, it could lead to a decrease in demand for the local currency, potentially leading to a depreciation in its value. In Kenya, there is a current dollar crisis which has prompted government intervention.
Regulatory implications: Apple’s entry into the financial services market could have regulatory implications in developing economies. Regulators may need to consider how to regulate Apple’s savings account and ensure that it complies with local laws and regulations and protect their people. It is worth considering that well-meaning regulation and government intervention could backfire badly.
Therefore, how should Africans and people from the developing world take advantage of this? This is an opportunity to:
Access to financial services: Apple’s savings account could provide access to financial services for people in Africa and the other developed nations who don’t have access to traditional banking services. This could include people living in remote areas or those who don’t meet the requirements for opening a traditional bank account.
Access high-interest rates: Apple’s savings account is rumored to offer high-interest rates. By taking advantage of these rates, people from Africa (and other developed nations) could potentially earn more money on their savings than they would with other savings products. This could help people build up their savings and improve their financial security, especially in a strengthening dollar.
Use an easy-to-use digital platform: Apple’s savings account is expected to be a digital product that users can access through their iPhones. This could make it easy for people from Africa (and other developed nations) who have smartphones to manage their savings and access financial services from the convenience of their homes.
Benefit from competition with traditional banks: Apple’s entry into the finance sector could create competition with traditional banks. This could potentially lead to better interest rates and fees for consumers in Africa and other developing nations.
Access products through Apple’s expansion: If Apple’s savings product is successful in Africa and other developed nations, it could lead to the company expanding its financial services offerings in the regions. This could provide more opportunities for people from those nations to access financial services and improve their financial security.
In conclusion, Apple’s entry into the finance sector through the launch of a savings product is a big boost to Africa and other developed nations, and in as much as it will increase financial inclusion and competition, it could also have potential currency and regulatory impacts.
Implications of Apple Launching a Lucrative Savings Account On Developing Nations
In October 2022, Apple announced that they are launching a savings account paying 4.15% per year, without fees or account balance minimums. This marked a shift in technology towards banking. Previously, technological advancements were felt in the personal computer, the music industry, the mobile phone industry, and the tablet computer industry, and Apple cemented her position as the leading in those industries. This time, Apple has set its eyes on the finance industry. This will be the birth of a massive disruption.
In March 2023, Apple launched Apple Pay Later, a product that allowers consumers to buy on credit in 4 equal installments over 6 weeks with no interest or fees.
As Apple charges forth in the finance space, it is imperative to know the implications of the tech giant’s activity on Africa and other developing economies:
Therefore, how should Africans and people from the developing world take advantage of this? This is an opportunity to:
In conclusion, Apple’s entry into the finance sector through the launch of a savings product is a big boost to Africa and other developed nations, and in as much as it will increase financial inclusion and competition, it could also have potential currency and regulatory impacts.