Data Dive, New Releases Edition: Apple, Affirm And U.S. Bank Regulators

The month of January is considered a mixed bag for movie buffs. While a lot of award hopefuls appear on screens in January, the big push for the serious award contenders really happens the year before. January, on the other hand, is a month for releasing movies that studios hope are good enough to get people to the movies, but not so good as to score an invitation to the following year’s Oscars or Golden Globes.

But where Hollywood fails, payments and commerce succeeds, as last week had no shortage of new, potentially Oscar-worthy releases. A few examples:

The New iPhones Are Coming

Despite reports that indicate Apple’s iPhone XR has faced limited interest and weak sales, Apple will be giving its LCD phone at least one more ride. The XR was Apple’s only LCD model released this year; the iPhone X and XS both have OLED screens.

According to reports in The Wall Street Journal, three new phones will be hitting the market in fall of 2019, coming with new camera features like a  triple rear camera for the top-of-the-line iPhone and double rear camera for the two lower-end models.

One of those lower-end models will reportedly include the LCD screen. According to sources, the new LCD handset has been planned for months now and changing it would be very difficult.

Still the future for the model seems uncertain, given the XR’s struggles in the market. Earlier this month Apple lowered its revenue target to $84 billion for the first quarter, lower than the $89 billion to $93 billion in revenue it had previously projected.

Slowing demand among Chinese consumers was the main explanation offered, but since the revenue prediction reset, investors and analysts have worried that there is more bad news to come from Cupertino. The Asian Nikkei Review reported this week that Apple could cut production by as much as 10 percent in the current first quarter.

The Journal also noted that Apple might be considering a move away from the LCD models entirely by 2020. 

Affirm Offers High-Interest Savings Accounts

Affirm, an alternative credit company created by entrepreneur Max Levchin and best known for its POS credit product, is testing a new free saving account that offers a 2 percent annual interest rate.

“As part of making good on our mission to provide honest financial products that improve lives, Affirm is constantly exploring ways to test and pilot new features and offerings,” Levchin said. “Based on user feedback and strong consumer interest, we’re working on a pilot that gives existing Affirm users the ability to put money into a savings account via our app. We are taking a thoughtful approach and are excited to get user feedback on the experience when the time is right.”

Affirm is the latest, but not the first entrant to this emerging high-interest savings account market. Goldman Sachs kicked off 2019 by boosting interest rates for Marcus savings accounts, paying online savings account customers a 2.25 percent rate starting on Jan. 4.

Also, the rate on a one-year certificate of deposit is up 10 basis points, rising to 2.75 percent.

In late 2018 FinTech Robinhood announced a checking and savings product with 3 percent interest. The move got a lot of attention — but also generated questions about how the money would be insured and if it would be protected like a bank account that has the backing of the Federal Deposit Insurance Corporation (FDIC). The product was quickly pulled back — and as of today no mention of high interest check or savings exists on Robinhood’s site.

Affirm plans to roll out its new savings account as a pilot within the first quarter, according to a company spokeswoman, who emphasized Affirm is still finalizing details of the offering in an effort to comply with regulators.

Regulators Release New Shutdown Guidance

The United States is currently involved in the longest government shutdown in its history. And while that milestone is perhaps the more historically significant, last Friday also marked the first time federal workers affected by the shutdown officially missed their paychecks.

There is no end to the shutdown in sight as of yet, and U.S. banking regulators are working to help federal workers by officially asking lenders to help out who cannot pay their bills or need credit in the meantime, according to a report from Reuters.

“The agencies encourage financial institutions to consider prudent efforts to modify terms on existing loans or extend new credit to help affected borrowers,” the U.S. Federal Reserve said in a statement. The Fed added that efforts by banks to help wouldn’t be criticized by bank examiners.

“While the effects of the federal government shutdown on individuals should be temporary, affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans or credit cards,” the central bank said.

The statement came care of the FDIC, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the National Credit Union Administration and the Conference of State Bank Supervisors. It also urged affected workers to contact lenders and attempt to discuss arrangements.

The shutdown is also clearly on the mind of the workers at the Federal Reserve. Speaking in Washington last week, Federal Reserve Chairman Jay Powell discussed the possibility that this supersized shutdown could end up causing broader economic ripple effects.

“A longer shutdown is something we haven’t had,” he said. “If we had an extended shutdown, then I do think that would show up in the data pretty clearly.”

Powell stressed that the Fed is watching “patiently and carefully” while it keeps an eye on how things will turn out. It’s likely that about 800,000 federal workers unsure if they are going to miss another paycheck are watching along with him.

So what did we learn this week? There is always something new to see in payments and commerce.

Until next week!