Apple announced today that it is moving into the credit card industry, with promises to enhance the credit card experience via no fees, lowered interest rates, and attractive rewards. The company first showed interest with this industry when it launched “Apple Pay” on the iPhone, allowing iPhone users to use an app to pay for their purchases.
The card is both digital and physical; users get a digital card where they can use anywhere that Apple Pay is accepted. They are able to track purchases, check balances, and see when their bill is due from the app. The physical card is also interesting because there is no number, CVV, expiration date, or signature in the card; all information is stored within the Apple Wallet application.
In terms of rewards, Apple is not going the traditional points-based route. Instead, it gives rewards in the form of Daily Cash, which is applied toward the Apple Card whenever purchases are made. 2% cash back is given for apple pay purchases, 3% is given for purchases from Apple, and 1% is given for physical card purchases. It also boasts no late fees, annual fees, international fees, and lower interest rates.
Apple seems to have taken the forefront on privacy concerns, as well. VP of Apple Pay Jennifer Bailey has said, “Apple doesn’t know what you bought, where you bought it, and how much you paid for it.” Furthermore, Apple is partnering with Goldman Sachs and MasterCard for payment processing.
We’ve seen Apple revolutionize many of the industries that it pushes towards. While the Apple Card doesn’t seem game-changing yet, we will have to wait and see how Apple will evolve this new service.