Apple now has become a fintech company. Apple Pay transactions tripled compared to the previous year, totaling more than a billion. This Apple is even ahead of the financial service providers Square and PayPal, as far as mobile transactions.
Today, Apple secures its place as a major player in the fintech sector with the Apple Card. The iPhone already uses Apple’s Wallet app, Apple Pay and Apple Pay Cash. The Apple credit card was therefore the next logical step.
Apple has partnered with US bank Goldman Sachs to enhance the credit card experience. And providing a more customer friendly approach to their use. Thus, transactions should be presented in the most transparent way possible in a list organized in an easily understandable format. In addition, there will be a more flexible way to settle outstanding amounts.
Apple Card
The Apple Card was developed to complement Apple’s existing payment options. Ultimately, the Apple Card is to replace all your other credit cards. As an incentive Apple offers you therefore Apple Cash.
Each time you pay with the Apple Card, you receive two percent of the amount as cashback. This is a feature the company calls Daily Cash. Purchases made directly at Apple even bring you three percent. That could help Apple to increase sales with its own products. It also gives customers a bigger incentive to pay Apple the full price instead of looking for lower prices from other vendors.
In addition, there are no credit card fees, no delay fees and no international fees. In addition, Apple promises lower interest rates than its competitors. The Apple Card will be accepted through MasterCard’s global payment network.
Although the card is actually digital and linked to your iPhone, there will also be a physical card made of titanium that you can use to shop at retail as usual. Shopping with this physical card entitles you to only one percent cashback via Daily Cash.
Privacy and Security
Apple continues to rely on privacy and security. The company promises that customers will not become a product through these services. Which means that Apple will not sell personal information to third parties. With the Apple Card, the company can offer similar data protection and end-to-end encryption to transactions as other communications that run through Apple’s servers. In addition, Apple promises that Goldman Sachs will not disclose transaction details to third parties.
Previously, the Apple developed Apple Pay system largely acted as an intermediary between card issuers and retailers. Authenticating users identities so that purchases could be made wirelessly. Apple receives a small percentage of its revenue from each purchase in exchange for the bio-metric identification of the customer. But with the Apple Card, Apple will now receive a larger share. As the company is now also involved in the issuance of credit cards, relationship management and transaction business.
What is the rest of the industry doing?
Alibaba
The Alibaba subsidiary and Fintech giant Ant Financial expanded from payment transactions to asset management. According to analysts from research firm Bernstein, the Chinese company now operates a robotic consulting service. Which uses artificial intelligence based on payment activity to provide investment advice. The core payment service acts as a gateway to a wider use of the service,. This is a model that other technology companies could follow.
Cell
Cell is a money transfer service launched in June 2017 to help banks compete with peer to peer payment apps such as Venmo and Cash App. Cell, which is integrated with Member Bank apps, will overtake Venmo in user numbers this year, according to eMarketer. By the end of the year, they will increase by more than 73 percent to 27.4 million users in the United States. This would be far ahead of Venmo which is 22.9 million and Square Cash’s 9.5 million.
Others
On the other hand, Android Pay and Samsung Pay have a larger potential number of users. However, research analysts at Juniper predict Apple Pay will have 227 million users by 2020, more than Android and Samsung combined.
Apple and Goldman Sachs will be offering the Apple Card starting this summer. Apple says it will sign in directly from the iPhone for quick approval and access to device specific card numbers.