At the Apple event on Monday, the company announced that it will partner with Goldman Sachs and MasterCard to offer its own credit card, not only within the Apple Wallet app but also as a physical metal credit card that can be used anywhere Apple Pay is not. get.
The Apple Card comes with no late fees, annual fees, over-the-counter fees, or international fees. The company promises a lower interest rate, but that rate doesn’t seem to have been made public yet. Instead of giving points, Apple Card will apply money to the customer’s card. Customers get 2 percent cash back on purchases made with Apple Pay and 3 percent cash back on purchases made on Apple products.
On pure economics, Ted Rossman, industry analyst at CreditCards.com, said Apple’s cash back terms are good but not great. Rossman points to Citi’s Double Cash card, which offers 2 percent cash back on every purchase (not just purchases made with Apple Pay) or US Bank’s Altitude Reserve Visa Infinite card, which “gives three points per dollar on mobile wallet expense (worth 3 percent). cash back or 4.5 percent off travel).”
“I certainly see why Apple is doing this: they want to juice the use of Apple Pay (Crone says PayPal/Venmo has 267 million users versus 32 million for Apple Pay),” Rossman wrote. “Also, as a merchant, they’ll save on transaction fees when Apple Card users buy something from Apple. And as a service provider, they’ll get a cut of Apple Card transactions elsewhere.”
Apart from the financial considerations of the Apple Card, the company is clearly trying to attract users to its customer-friendly accounting and reimbursement schemes. The company presented its application in front of the Cupertino, California, audience, emphasizing that it wants to make compensation easier and more understandable for users. The app shows the total balance and weekly spending when it’s open, and the repayment screen allows customers to adjust their repayment schedule to see how much interest they’ll pay if they pay back their credit more quickly.
The Apple Card will be available this summer. The company says customers will be able to sign up and start using the card “in minutes” and that customer support will be available 24/7 via Messages.
On stage, Apple’s Vice President of Apple Pay, Jennifer Bailey, said that the company will use machine learning to provide customers with an intelligent, intelligent merchant name in their transaction history. (Often, credit card statements show the address of the merchant or parent company, which can be confusing when a customer goes back on their credit history.)
Physical card, digital security
Apple was one of the first major companies to sign customers’ third-party credit cards in the Apple Wallet app, offering additional security during transactions. Tokenization replaces a customer’s card number with a token, so the actual card number is not passed back and forth in a way that would be susceptible to hacking.
Apple says its own card will keep customer information private as well. A token representing the card number is stored on a phone’s Security Agent—a separate chip that has little interaction with the phone’s full operating system.
When Apple Pay was first rolled out in 2014, Apple said that the token linking a transaction to a specific customer would be encrypted and stored on Element Secure without access to Apple. It looks like the company will use the same setup for its card, writing in a press release that “The unique security and privacy architecture created for Apple Card means that Apple doesn’t know where a customer bought, what they bought, or how much they. pay.”
In accordance with EMV standards that are common place throughout the US, purchases are authorized through Apple Wallet with a “one-time unique security code” and authorized by the user with Face ID or Touch ID recognition.
For its own metal card, Apple has removed several vulnerabilities that allow hackers to steal card information in brick-and-mortar stores. The physical card does not have a number or CVV security code printed on it, and a date and a space for signature are also missing. “All this information is easily accessible in Wallet to be used in applications and on websites,” explains Apple. “For purchases made with the titanium Apple Card, customers will receive 1 percent Daily Cashback.”
Apple partnered with Goldman Sachs as the bank offering to issue its credit card, which will be branded MasterCard. “As a newcomer to consumer financial services, Goldman Sachs is creating a unique customer-focused credit card experience, which includes never sharing or selling data to third parties for marketing and advertising,” Apple wrote in the release.
Image listing by Apple