Apple has acquired UK-based fintech startup Credit Kudos, signaling a deeper push into payments technology by the iPhone maker.
Credit Kudos is using machine learning to create an alternative to traditional credit scores, suggesting the US tech giant could be considering expanding its lending services. Apple offers a credit card, which is currently only available in the United States, in partnership with Goldman Sachs, and also offers installment payment plans for its devices.
Apple expanded into financial services more slowly than some in banking had feared in 2014 when it launched Apple Pay, which enables contactless payments using its iPhone and watch and through their Safari web browser.
Reports last year suggested that Apple was planning to introduce a “buy now, pay later” feature in Apple Pay, similar to payment options offered by Klarna, PayPal and Afterpay.
Acquiring Credit Kudos could provide that functionality to Apple, said Simon Taylor, chief product officer and co-founder of fintech consultancy 11:FS. “Instead of forcing consumers to apply for full credit just to buy a $50 jacket, why not quickly check their financial capacity and creditworthiness directly from their bank account?”
Credit Kudos does not have a banking license in the UK, but takes advantage of the country’s open banking standards, which aim to make it easier and safer for consumers to share selected financial information from bank accounts and cards. credit with hundreds of small service providers.
The London-based fintech raised £5m in 2020 in a funding round led by Albion VC.
In an effort to make affordable credit more widely available and help with faster lending decisions, the company is examining alternative metrics to assess individuals’ credit risk for businesses, including rental apps, brokers and other fintechs. Traditional credit reporting measures such as bank statements and utility bills have been criticized for their ability to accurately assess a consumer’s financial situation.
Apple has made several acquisitions in the UK in recent years, including audio recognition company Shazam, voice technology company VocalIQ, imaging start-up Spectral Edge and some units of chipmaker Dialog Semiconductor.
The Silicon Valley-based company rarely makes large acquisitions, instead acquiring small teams or complementary technologies that it can use to accelerate the development of new features for the iPhone.
Credit Kudos declined to comment on the takeover, which was first reported by fintech news site The Block.
Apple said, “Apple buys small technology companies from time to time, and we don’t usually discuss our purpose or plans.”
In another example of American tech companies rushing European start-ups, Snap announced on Wednesday that it had acquired NextMind, a Paris-based maker of “brain-computer interface” technology. The technology, which remains at an early stage of development, can be used for hands-free control of virtual and augmented reality headsets.
“This technology monitors neural activity to understand your intent when interacting with a computer interface, allowing you to simply press a virtual button and focus on it,” Snap said, while adding that it “don’t ‘read ‘ not the thoughts and sends no signals to the brain”.