In previous decades, Apple massively disrupted the personal computing, music, and mobile phone industries. Now, the Silicon Valley giant seems poised to disrupt the banking sector. At the company’s March 25 event, the world was introduced to the Apple credit card.
Although consumers won’t be able to get their branded payment cards until the summer, Apple’s latest innovation looks very appealing. For one thing, it’s both a physical object and an extension of the firm’s existing Apple Wallet system.
Users will be able to make purchases with their digital Apple Card anywhere Apple Pay is accepted. As an incentive, all payments made with the service will give two percent cash back. Moreover, that rate will jump to three percent for any Apple product purchases.
If account holders want to do business with non-Apple Pay accepting retailers, they can do so with their titanium physical cards. In addition to looking amazing, the Apple Card gives users one percent cash back on all purchases.
Ultra-Slick and Ultra-Secure
Like all Apple products, the key appeal of the firm’s new credit card is its gorgeous minimalist aesthetic. However, the Apple Card’s robust security features will likely interest consumers uninterested in appearances.
The digital Apple Card is biometrically locked, so users authorize purchases via Touch or Face ID.
The Goldman Sachs-issued physical card doesn’t display a card number, expiration date, or card verification value. The laser-etched card will use Mastercard as its payment processor.
Unfortunately, while the Apple Card has some impressive security attributes, they won’t do much to protect against online payment fraud. Unless the e-retailer you’re doing business with accepts Apple Pay, you’ll have to give them your card data. Consequently, if that company’s servers are breached by hackers, you could be one of the millions of people whose payment information is stolen every year.
Extra Features and High APR
Notably, Apple is using its tech credentials to position its new financial product as an alternative to traditional credit cards.
First off, the firm makes a point to note it won’t saddle customers with annual, cash advance, international, returned payment, or over the limit fees. However, cardholders will still have to pay interest on their lines of credit, between 13.24 and 24.24 percent APR. Given how broad that range is, it seems like Apple is interested in targeting consumers with both high and low credit scores.
Moreover, users can learn how making a payment will affect their overall interest rate before making it. The corporation will also allow consumers to conveniently schedule their card payments around their pay periods. Additionally, customers will be able to access detailed spending breakdowns with just a few taps on their iPhones.
Apple Wallet will also give users a location-based purchase history via Apple Maps. That way, they can quickly and definitively identify fraudulent transactions.
Currently, it’s estimated there are 190 million iPhone owners living in the United States. Forbes predicts Apple will be able to convert 15 percent of its user base, 30 million people, into Apple Card customers by 2022. If that happens, the firm will likely have more cardholders than Wells Fargo and will be bringing in billions in annual revenue.
As the Silicon Valley giant’s phone business has been soft lately, a pivot to banking might be just what the doctor ordered.