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Could Apple Become Your Next Bank?

NEW YORK ( TheStreet) -- Apple (AAPL - Get Report) could become your next bank -- and that's not as surprising as it might seem. Sears (SHLD) stepped into the banking industry from consumer retail in the 1980s with its Discover Card (DFS), before selling Discover to Morgan Stanley (MS) 12 years later.

Discover revolutionized credit cards at the time. Its card didn't have an annual fee, and it set the pace for reward cards. I remember when Visa (V), Master Card (MA) and American Express (AXP) were not welcome at Sam's Club (WMT), and if you wanted to use a credit card, you pulled out a Discover card.

I would have used a Discover card anyway, because I wanted to earn the much-hyped "2% cash back." Reward cards have come a long way since, and the primary card I now use is from Capital One (COF), because of its great points program.

Apple has the money, technology, critical mass of customers and ambition to change the face of banking and payment processing. TheStreet's Chris Ciaccia noted in his article that Apple has more than 500 million credit card users on file. He went on to write that Apple was recently for managing credit through a mobile device.

You don't have to connect many dots to achieve the same conclusion as TheStreet's Richard Saintvilus that Apple is becoming a major disrupter in banking and payment processing. The only question is by how much and what it means to shareholders.

With Apple's global reach through mobile devices, another payment form on the scale of Amazon (AMZN) is not only possible, but moves beyond the borders of the Internet and into the retail world. In fact, as Apple payment methods move beyond national borders, they could make buying and selling foreign currencies a thing of the past, much as the Euro has.

With Apple's global reach, an iBuck could become the most popular payment method, both on-line and retail. It's a small step into consumer finance. eBay (EBAY) through PayPal and GE's (GE) GE Capital may soon face a new market entrant for consumer interest collection. I can envision a day soon when a car buyer is reviewing financing at the auto dealer's and instead decides to use iLoan to finance the vehicle through Apple.

Apple short-sellers be warned: The office located at 1 Infinite Loop has everything needed to continue growing and delivering shareholder value in ways you haven't even thought about yet.

At the time of publication, the author held no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Robert Weinstein currently blogs, mentors traders, and writes several weekly columns in Rocco Pendola's Option Investing newsletter from his home in northern Wisconsin. Robert tends to focus on the psychological importance of goals, risk mitigation, emotion, and relatively short term market exposure. With nearly 30 years of studying and investing experience, Robert has experienced the many ups and downs in the financial markets and uses the knowledge gained to maintain balance. Robert believes the best way to make money investing is to avoid losing it. The best way to avoid losing is to know what emotional traps lay in the path of investors and learning how to avoid them. Robert is a voracious reader of financial related books often completing more than one book a week while not trading or writing. Robert contributes to his blog at on a regular basis with an emphasis on studying behavior finance.

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