Apple Underwhelms With Excursion Into Plastic Payments

March 28, 2019         By: Michael Millington

I definitely didn’t see this coming, but it definitely makes sense for Apple to do this.

Apple has announced a brand new credit card, backed by Goldman Sachs, that will be seamlessly integrated with your iPhone. Much like many of your existing credit and debit cards can be tethered to your virtual wallet, the Apple Card will be accessible through the same application, but with a few perks. Instant ability to view and pay your existing balance through the wallet app make the card simple to handle financially. With added benefits for the Apple faithful (like 3% cash back on Apple purchases and 2% cash back with Apple Pay purchases) the card might seem like a great idea for some.

However, don’t expect the Apple Card to start any trends.

Moving past the grand introduction the Apple Card received at Apple’s March 25th conference, delving deeper into the offering reveals a credit card that brings little to the table. As credit expert and Deserve CEO Kalpesh Kapadia recently stated, it’s hard to see who Apple is targeting with this card outside of fans of the Apple brand.

“From a cashback rewards standpoint, the Apple card is below market for a premium segment (super prime), which tend to have higher rewards (such as Chase Sapphire Reserve, Uber Card and Amex Platinum)” says Kapadia. “This is a crowded space with preferences/loyalty already set for super prime customers, though the card could resonate with Apple fans. Uptick in use will also depend on underwriting and approval odds, which I imagine will be controlled by Goldman Sachs. To me, jury is still out, as it is not clear who the target audience is beyond Apple fans.

Apple is a large company, and can, in many cases, afford to make mistakes. It’s not clear what their plan is with the Apple Card, but time will tell if it becomes a hit with the fanbase or another drop in the bucket.