Apple's new credit card could mean saying goodbye to your wallet
It’s the biggest Apple launch since the iPhone XR last autumn. But, unusually for the brand that’s built its name on its mobile handsets in recent year, this isn’t a new phone, it’s a credit card – the imaginatively titled Apple Card. Announced back in March and developed with backing from Goldman Sachs, it rolled out its first few cards to a random selection of eager Apple customers in the US today. So what can we expect to see from the Apple Card? Here’s our thoughts on what it has to offer.
1. Firstly, the Apple Card… isn’t actually a card
Rather, it’s a virtual credit card that appears in your Apple Wallet once you’ve signed up and answered some questions from the Goldman Sachs team. It works using Apple Pay technology, allowing users to buy anything they want on their phones without ever getting their wallet out, as well as to view their balance and transactions in real time in the Apple Wallet.
While customers can send off for a titanium Apple Card (to use in the few locations that don’t yet accept Apple Pay) this is more of a footnote, with users very much encouraged to prioritise using Apple Pay over the physical card – more on that in a bit.
2. Strangely, you won’t get a credit card number
Unlike every other credit or debit card, the physical card that you can receive will be completely blank – no card number, security code, expiry date or signature. Instead, the card’s number is stored in a secure chip inside your Apple Wallet, which then generates numbers for any online purchases that require it.
According to Apple, this will be more secure than normal bank cards, as customers’ card numbers can’t be stolen or cloned. While this is a compelling innovation, what is more interesting is the way the card prioritises Apple Pay’s own security measures – for example, the fingerprint and facial identification you need to be able to work it – rather than traditional banking processes. It’s certainly a step forward in terms of card security, but hackers and hoaxers are a creative bunch – only time will tell in terms of how safe it actually is.
3. You’ll get cash back (and more so if you buy Apple products)
One of the major draws of the new Apple Card is the cash back it offers on all purchases. Its incentivising is crystal clear here: you get three per cent back on all purchases of Apple products, two per cent on any purchase made using Apple Pay, and a mere 1 per cent when you use the physical card. The cash back appears in your Apple Pay Cash account, and can be used however you wish – transferred to another bank or to pay off your credit card’s balance.
Of course, it’s a patent encouragement to buy more Apple products, and to use Apple Pay for everything else. While it’s a refreshing antidote to other credit cards’ complicated points systems, it’s also a clever incentive for users to stay entrenched in the Apple world – and, most significantly, to keep your money circulating within it.
4. Your privacy is protected – but only on Apple’s terms
Apple has made a big deal about protecting users’ privacy with the Apple Card. It says that customers’ purchase history is stored on their phones, and that the company can’t see or use that information. It has also emphasised that Goldman Sachs will not be allowed to use data from the Apple Card for marketing purposes.
‘We at Apple believe that privacy is a fundamental human right,’ said Tim Cook, Apple’s CEO, at a conference in Brussels last year. But there’s a caveat to that. Apple already has all the data it could ever need on its users, from our web searches on Safari to our daily journeys on Google Maps. And that’s not to mention the fingerprint and facial recognition software that come installed as standard in the latest iPhones. Any more information that it collects through the Apple Card – users’ credit scores, for example – will just be icing on top of that particular privacy cake.
5. Basically, Apple wants more from you than just your iPhone
Apple’s recent 2019 Q3 report showed that iPhone sales were down 12 per cent year-on-year, a further drop following a bad performance in 2018. It’s no coincidence that, in reaction to these poor sales, the company has decided to diversify its offering this year to include the Apple Card as well as a streaming service due to launch this autumn, and Apple News+, a magazine and newspaper subscription service. Apple is also working to solidify its presence around the world, introducing on-phone metro tickets in Beijing and Shanghai, and digital student IDs on college campuses in the US. It’s also expressed interest in one day replacing driving licences and passports with a digital ID that’s hosted on your iPhone.
Of course, in the identification card-shy UK, that day is probably a long way off. But the introduction of the Apple Card indicates that we’re one step closer to having everything we need – from our address books to our calendars to our credit cards – exist on one small hand-held device. How futuristic. Most of all, though, the introduction of the Apple Card also shows the brand’s determination to embed its users even further in the Apple ecosystem, and ward off competition from other tech brands by making everything simple, convenient and all in one place. After all, it’s already made music players, landlines and TVs pretty much defunct. It’s only a matter of time before it makes your wallet – and other credit cards – defunct, too.