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Apple Card: How Apple Becomes Fintech

Apple becomes the provider of credit cards, albeit (initially) only in the US. The company from Cupertino presented its own credit card in cooperation with Goldman Sachs at yesterday’s launch event in the USA. This is specially designed for users of the iPhone and should offer some additional features. The Apple Card will be available from the summer, but has some disadvantages that Tim Cook has not specified on the occasion of the keynote.

Apple Card: up to 24.24 percent interest

Rumors about the Apple Card had already been around four weeks ago (we reported), now the company is serious. Together with Goldman Sachs and Mastercard, Apple is leading the product, which is closely linked to the iPhone wallet app, in the United States. The Wallet app should be further developed in this context and receive additional functions. But Apple would not be Apple, if you would not endow the whole thing with a little more convenience and clarity: The customer sees in the wallet the expenses incurred and can see with a graphical overview of what sums are currently outstanding and what purchases were made at which dealer ,

The users of the Apple Card receive a cashback, which is credited to Apple Pay Cash

This is usually at two percent, when it comes to Apple products, at three percent. In addition to the virtual variant of the credit card, there will be a physical card in the Titan look, which has also recognized other banks (such as N26) as a chic status symbol. Who pays with this physical credit card (by the way without CSV number and printed number), receives one percent remunerated. With the help of appropriate machine-learning functions, the system should be able to. Allocate expenses to specific sectors or headings.

Apple will not charge fees for the card, as it was somewhat premature on the occasion of the event. The foreign assignment should also cause no additional costs. However, on closer inspection (at least from a European point of view), the interest rates are pretty high: Up to 24.24 percent interest accrues, according to the small print, the interest rate is based on the creditworthiness of the customer. In the best case, the customer is asked with 13.24 percent to checkout, which would be in the context of the usual (but not particularly cheap, as Apple represented).

The key with iPhone

And there are obviously a few more restrictions that dropped the company in the keynote speech: So the iPhone apparently has Face ID or Touch ID and by far not every owner of an iPhone also qualifies for the Apple Card. The company has not yet disclosed details of this, but Goldman Sachs should apply the usual creditworthiness rules here.

In the long term, the credit card will probably come to Germany, but until then it can take some time, according to experience (see Apple Pay). It also depends on when Goldman Sachs is considering opening up new markets for its retail client Marcus.

The next step would be in continental Europe, it will go to Germany. But we really want to get business going in the UK and we certainly have some time before we start there. ”

How revolutionary is the Apple credit card?

All in all, these days, it’s not a product that can be described as revolutionary after subtracting the Apple hype bonus. But it shows that Apple is watching what is happening in the fintech world – and responding by mixing the best of all worlds together. The overviews can, compared to other products of the banking industry in the US, give the customer a much higher level of overview. Trend overviews and forecasting models can actually help the customer.

And the product shows one more thing:

Apple knows how to cooperate with the right partners and should be able to learn a lot about the consumer behavior of its customers from the new product. However, it is unclear to what extent the company itself or the cooperation partner Goldman Sachs capitalize on this: For in the past, Tim Cook has always maintained that data-driven, marketing-oriented business models (unlike Google or Amazon, for example) are not Apple’s thing and for that reason, customers do not have to worry about Apple developing business models from this.

Whether or not such cooperation, as prestigious and valuable as it is for a bank like Goldman Sachs, is the right way to go, is difficult to assess. After all, banks are increasingly seeing that they no longer have sole control over financial sovereignty and that in the future Google, Apple, Amazon, and above all Alibaba and JD.com will play their part in the worldwide payment market.

Published inFintech

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