What’s more, as soon as these new lenders start to gain any sort of scale, regulators start to become interested. Three years ago, payday lender Wonga (remember them?) was the darling of the UK’s fintech scene, considering a £1.5bn IPO and growing profits hand over fist. As soon as the Financial Conduct Authority got its claws into the company, introducing new regulations and price caps for payday lenders, growth stalled and profits slumped. Last year, Wonga made a £37m loss. Regulation is the major reason that Apple, Google and Facebook are so unlikely to become banks, beyond occasionally dipping their toes in payments and money transfers. Since the financial crisis, banks – strictly, companies with banking licences that allow them to take deposits – have had to raise billions in capital, hire thousands of compliance officers and restrict bonuses. Not only that, they have repeatedly been handed multi-billion pound fines for misconduct that occurred years ago. One former telecoms executive, who has since moved into banking, recently told me he had thought his prior industry was heavy on rules, but got a nasty shock on moving to financial services.
Apple Pay will not provide the spark that will drive technology giants to disrupt the traditional banking sector , according to analysts . Rather , reports suggest that banks ' profits may even suffer due to the impact of increased use of mobile payments , as businesses such as Apple Pay charge only a tiny percentage of a transaction fee , while the merchant 's bank will take the bulk of the total payment .