What do you do when:
- Your App Store brings in $11 billion annually?
- You’ve sold more than 2 billion phones worldwide?
- You’re company’s valuation exceeds $1 trillion?
The answer is simple.
You go into mobile payments, of course. That’s precisely what Apple did with the introduction of Apple Pay — a virtual wallet that allows users to link credit cards to their phones, whether they’re shopping:
- On an e-commerce site
- Within the App Store
- In-person at a retail store
But Apple has decided to take this concept to the next level with the introduction of Apple Card.
The question is — will this new payment option change the shopping landscape, or is Apple Card just a lot of hype?
Apple Card at a Glance
When it officially launches later this year, Apple Card will come in two varieties:
- A physical, titanium card that you can dip at POS checkout counters
- A “virtual” card in your Wallet app on the iPhone (similar to Apple Pay)
As with everything from Apple, both of these payment options will be tightly integrated into the company’s larger ecosystem.
Yet, crucial differences between Apple Card and more established payment options exist — such as consumer plastic and virtual wallets.
1. Instant Approvals
Apple plans on making the approval process instant — by allowing users to “apply” directly through their mobile devices. Once approved, customers can begin using Apple Card right away.
This is in sharp contrast to traditional credit card applications that involve:
- Mailed-in paper forms
- Long approval delays
- Mailed back plastic
- 1-800 # activations
2. Unparalleled Security
The mobile component of Apple Card functions much like Apple Pay — complete with in-built security features such as encryption, tokenization, and Touch ID.
However, the EMV-enabled titanium card that customers receive won’t have any numbers on the front or back. This omission will make it harder for criminals to “hack” the physical version of Apple Card.
When shopping online, customers can quickly generate virtual card numbers within their phones. If using Safari, the requisite payment information instantly autofills — further highlighting how tightly integrated Apple’s ecosystem truly is.
3. Hassle-Free Rewards
Whenever users shop with Apple Card, they receive cash back rewards that are applied to their balances daily — not monthly (as with most credit cards).
Some of these rewards are quite generous:
- 3 percent cash back when shopping across any of Apple’s properties (e.g., iTunes, the App Store, iCloud)
- 2 percent cash back if you use the mobile version of Apple Card anywhere it’s accepted
- 1 percent cash back when using the physical, titanium, chip-enabled Apple Card
4. Detailed Analytics
Many credit card companies try to get you to spend more by obscuring where your money is actually going.
Instead, its new payment option comes with a detailed dashboard that shows everything at a glance:
- Color-coded by category
- Geo-tagged by location
This level of detail can help make budgeting and saving much easier for the average consumer.
Apple Card’s Formula for Success
The above features are all serious perks that will likely make Apple Card a worthy contender in the increasingly crowded payments landscape.
Still, there are a few additional distinguishing factors that could make Apple Card a game-changer for the retail and payment card industries.
Namely — fees and interest.
1. Apple Card = No Fees
Apple Card doesn’t carry any application, annual, late, overdraft or cash advance fees for the user.
This fact alone immediately places Apple Card in a league of its own. After all, what customer wouldn’t want to avoid all of the penalties and fees that normally come with credit card usage?
2. Apple Card = Low Interest
Apple Card isn’t really a “money maker” for the company. Instead, it is a loss-leader designed to pull more users into the Apple family. It can afford to offer some of the lowest interest rates in the industry.
Better still, the Apple Card dashboard automatically estimates how much interest you’ll incur — depending on your closing balance for that month.
- The due date for payments is the same for everyone (i.e., the last day of the month).
- Apple Card will send automatic reminders as the due date approaches.
- You can pay down your balance multiple times throughout each billing cycle.
Will Apple Card Be a Game-Changer?
It’s impossible to predict the future, but Apple Card has the potential to change how we shop. In addition to a range of enticing features, the company’s new payment option is simpler and more affordable than what we’ve come to expect from conventional consumer plastic.
It also helps that Apple Card is backed by heavy-hitters like:
- Mastercard, which is responsible for the company’s global payment network
- Goldman Sachs, which is the bank underwriting Apple Card