Apple buys British fintech start-up Credit Kudos

Apple has acquired UK-based fintech start-up Credit Kudos, signaling another foray 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 is looking to expand its lending services. Apple offers a credit card in partnership with Goldman Sachs, which is currently only available in the US, and also offers installment plans for its devices.

Apple has entered the financial services space more slowly than some in the banking industry feared, when the company introduced Apple Pay in 2014, which enables contactless payments with the iPhone and Watch, as well as the Safari web browser.

Apple was reportedly planning last year to introduce a "buy now, pay later" feature for Apple Pay, similar to the installment options offered by Klarna, PayPal and Afterpay.

Acquiring Credit Kudos could give Apple that functionality, according to Simon Taylor, chief product officer and co-founder of fintech consultancy 11:FS. "Rather than forcing consumers to do a full credit check just to buy a $50 jacket, why not quickly check their affordability and creditworthiness straight from their bank account?"

Credit Kudos does not have a UK banking license but uses the country's open banking standards, which aim to make it easier and safer for consumers to share select bank account and credit card financial data with hundreds of smaller service providers.

The London-based fintech company raised £5m in a funding round led by Albion VC in 2020.

With the aim of making affordable credit more widely available and contributing to faster credit decisions, the company is looking at alternative means of assessing credit risk of individuals for businesses such as rental apps, brokers and other fintechs. Traditional credit checks, such as bank statements and utility bills, have been criticized for failing to accurately assess a consumer's financial situation.

Apple has made several acquisitions in the UK in recent years, including audio recognition company Shazam, speech technology company VocalIQ, imaging start-up Spectral Edge and certain units of chipmaker Dialog Semiconductor.

The Silicon Valley-based company rarely makes large acquisitions, instead acquiring small teams or add-on technologies it can use to accelerate the development of new iPhone features.

Credit Kudos declined to comment on the acquisition, which was first reported by fintech news site The Block.

Apple said, "Apple buys smaller technology companies from time to time, and we generally don't discuss our intentions or plans."

Another example of European startups being acquired by US tech companies: Snap announced on Wednesday that it had acquired NextMind, a Paris-based maker of "brain-computer interface" technology. The technology, which is still in its early stages 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, so you can press a virtual key just by focusing on it," Snap said, adding that it "doesn't read minds". ' and sends no signals to the brain".