Apple buys UK banking startup for $150 million

Apple has acquired British open banking startup Credit Kudos, which aims to help lenders make better decisions. Credit Kudos provides insight and scoring based on loan applications, derived from bank data on transactions and loan results, sourced from the UK's Open Banking Framework. According to the company's website, the company's API offers lenders a way to obtain loans with faster, automated decisions, reducing risk and increasing acceptance rates.

The startup started raising capital in April 2020 with $6.5 million in investment, and the company is said to be currently valued at around $150 million. Three people close to a deal with Apple told The Block that the deal closed earlier this week. The Credit Kudos website terms of use link now redirect to Apple's terms of use.

It's unclear what Apple's plans for Credit Kudos are, but it's plausible that the company's technology could help Apple launch the Apple Card in the UK. The U.K. is one of Apple's most important markets, with the largest number of Apple Stores outside the U.S. and China, and new features and services often arrive first in the U.S. after they're launched.

Apple's main credit product, the Apple Card, is exclusively available in the US, but Credit Kudos' technology is based on the UK's open banking framework. It's possible that Apple could modify Credit Kudos' technology to work with the growing open banking sector in the U.S. to enhance Apple Card's credit checks, but Apple could also have U.K.-exclusive plans for the company.

There are huge differences in credit markets and financial regulation in countries around the world, so it will not be easy for Apple to launch the Apple Card internationally. It is likely that Apple will need to seek specific solutions to make lending decisions in each country, so it seems plausible that Credit Kudos could become the credit checking platform of choice in the UK. If so, the launch of the Apple Card in the UK could be a while away, as the company may integrate the Credit Kudos platform with the new international version of the Apple Card.

Following the success of Apple Card in the U.S., it makes sense for Apple to expand overseas. During a visit to Germany in 2019, Apple CEO Tim Cook confirmed his interest in launching the Apple Card internationally. In 2020, Samsung launched the Samsung Pay Card in the UK, seemingly to establish a foothold ahead of Apple.

Apple often acquires small businesses to enhance its technology and expertise, but apparently does not or immediately roll it out into products or services. On the other hand, many acquisitions do become key parts of Apple's ecosystem. In recent years, Apple has acquired businesses such as music recognition service Shazam and self-driving car company Acquired apps, such as Dark Sky and Workflow, were taken back as new Apple apps. Primephonic, a dedicated classical music streaming service, will next be integrated into existing Apple products, and a new classical Apple Music app is expected to launch this year.

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