Not too long ago, Apple announced its plan to launch the Apple Card, a credit card issued with Goldman Sachs in partnership with Mastercard. The Apple Card was officially introduced to a small group of iPhone users and will be rolled out to all users in the US in the near future. Is Apple aiming to disrupt the mobile payments arena with this initiative? Find out more in this article.
About the Apple Card
The card is both digital and physical; it’s stored in the user’s iPhone Wallet app and can be used as part of Apple Pay. In addition, users will receive a physical titanium card, with a sleek minimal design.
Unlike its competitors, the card displays the cardholder’s name only. Data such as card number, CVV, and signature are not present. Interestingly, the physical card does not support contactless payments, leaving Apple Pay the only contactless payment option for the cardholder.
The signup process is pretty straightforward; the user taps on their Wallet app and enters their address, birthday, income level and last four digits of Social Security Number. Goldman Sachs then performs a real-time check and approves or declines the application within minutes.
Fast facts and the small print about Apple Card
The Apple Card holder can benefit from a few cash-back incentives; 1% for physical card transactions, 2% for Apple Pay transactions and 3% for Apple product purchases.
The card holder must also adhere to specific terms. Among other typical T’s&C’s, jailbroken iPhone units will not be allowed to access or manage the Apple Card account and crypto purchases are banned.
What happens when the cardholder switches to Android or another smartphone? Without the ‘Required Device’, (i.e iPhone or iPad with a passcode), users will be able to access their account by contacting Goldman Sachs via phone or mail. The issuing bank also reserves the right to close the account in the absence of such devices.
What does this mean for merchants?
Businesses that already support NFC-based payments and Apple Pay will be able to accept Apple Card with no further action required. Considering the cashback incentives for consumers, this offering could potentially drive consumer demand.
The real question is about consumer adoption and what it will look like across various territories.
A research conducted by investment firm Loup Ventures shows that only 12% of Apple Pay users are located in the US. Countries like the UK, China, Russia and Japan demonstrate considerably higher adoption rates. Apple Pay is a popular choice among consumers in these countries who normally use it to pay for everyday expenses, such as public transportation, supermarket and online shopping.
In conclusion
It’s fair to conclude that this venture will bring multiple benefits to the parties involved.
Apple seeks to enhance its financial offering beyond Apple Pay with the help of Goldman Sachs. The latter will be introduced to a new target audience / market with state-of-the-art tech support by Apple. The partnership certainly nurtures a promising environment for mobile payments. But, will the Apple Card take payments in the US by storm?
This remains to be seen.
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