Apple has a new product. And it’s not a device or software. It’s a credit card. How exactly does it play into the Apple strategy? CGTN’s Mark Niu reports.
Apple’s new card has officially launched for all U.S. customers.
Apple has partnered with MasterCard and Goldman Sachs to introduce the sleek Titanium, laser-etched Apple Card.
“I think this will likely be the fastest growing credit card in history,” John Meyer, Managing Partner, Starship Capital said. “I don’t think any other credit card will match the speed of how quick this will likely grow.”
Venture Capitalist John Meyer said via Apple Wallet, it took him less than 30 seconds to apply for a card.
“Because Apple on your phone already has your personal information, the form is already filled out,” said Meyer. “All you really have to do is sign up, enter your social security and from there, an offer you can accept and then you get a card in the mail.”
Unlike other major credit cards, Apple and Goldman Sachs have said they will not share your personal information. The card also has no late fees and no annual fees. And through its software, it encourages you to pay less interest.
But many wonder how the companies involved will actually make money?
“I think that’s an open question,” said Ted Rossman, Industry Analyst at Creditcards.com. I don’t think this card is going to be a big moneymaker for Goldman or for Apple. I think both are playing the long game. For Goldman, it’s their entry into consumer finance for credit cards. For Apple, I think it’s part of this longer term view towards the payment ecosystem.
The Apple Card offers 1% cashback when you use the physical card, 2% cashback when using Apple Pay and 3% when buying something from Apple.
Rossman said while Apple is known for targeting affluent customers, this time it’s going for a broader base.
“I’m starting to think less of a card for reward chasers because they can do better with other cards, but more of an option for people who are new to credit or rebuilding credit,” said Rossman.
Recent earnings reports show Apple iPhone sales are falling while its services revenues continue to rise.
But venture capitalist Meyer said the two are intertwined, just like the Apple Card is with the iPhone.
“They’ve designed this, so if you get rid of your iPhone you can’t even pay the bill, so it’s probably one of the strongest forces in the future to keeping people on iOS as opposed to switching to Android,” said Meyer.
So while it might look like Apple is creating a new revenue stream by getting into banking, the card may also be a way to boost sales of its core product—the iPhone.