Apple Card is being billed as a game-changer, but we’re not so sure. Monday was a big day for apple-philes with the announcement of a handful of new ventures – each being touted as category-killers in their respective spaces. The stakes are fairly high right now as analysts are seeing sales of their flagship product – the iPhone – flatten out. So Apple needed to make a statement (or several) and let the world know they’re nowhere near done innovating.
But even though you’re Apple, hype doesn’t necessarily equate to breakthrough. In fact, as is often the case with mega-announcements, there is an inverse relationship between the level of hype and the value of the underlying product.
Here, in summary, is what the Apple Card is all about:
- Apple Card + Wallet: Apple says that its goal is to help you learn more about your spending, with less effort. For instance, the company is using a combination of machine learning and location services to help make card statements more readable.
- ‘Daily Cash’: One of the most interesting things about Apple Card is its daily rewards platform. Apple says that customers will get “Daily Cash” when they shop with Apple Card. This means that cash back is credited directly to your Apple Pay Cash card on a daily basis.
- Fraud detection: If Apple detects a potentially fraudulent charge, it will send you a push notification immediately. From there, you can report a problem or mark the transaction as “OK.” Apple Card also integrates with Apple Business Chat. This means you can easily communicate with support directly through the Messages app.
- Apple Card fees: Apple says there are “no fees, not even the hidden ones” with Apple Card, but that doesn’t account for interest. Apple says variable annual percentage yields will range from 13.24 percent to 24.24 percent. If you miss a payment, you won’t pay a late fee, but interest will accumulate at a quicker rate.
To get perspective on Apple Card and how it fits into the customer loyalty landscape, we asked The Wise Marketer’s CEO and COO (Bill Hanifin and Aaron Dauphinee, respectively) for their thoughts and opinions.
Apple is one of a select group of brands that could launch a cobranded credit card and actually make it “cool”. If you look at the benefits of the Apple Card rewards program, you can see that it’s not the 1-3% cash back that makes the card zing. The intrigue of the new Apple card is that it is a payment product with the high accessibility and utility consistent with the mobile device on which it resides. Even though people can get a physical card, I think most will opt for the digital version, where all information will be stored directly in the Apple Wallet app.
The economics of the card depart from the norm from most card issuers. With no annual fees, no late fees, no international fees, and no over limit fees, the Goldman Sachs / MasterCard issuing partnership leaves a bit of traditional money on the table. In the competitive card world of today, it might be the absence of late fees and international fees that will appeal to some consumers.
The Apple Card is a step towards Packaged Loyalty©, a concept exemplified by Amazon, which has packaged multiple unique brand attributes in its Prime program to create a strong customer magnet (dare we say loyalty program).
What I noted about the new Apple Card credit card was on the privacy front. They seemingly are staking out a competitive differentiator in committing to not sharing data with marketers and advertisers. While not necessarily a consumer pain-point entirely, it's certainly an annoyance with stories of improper data collection and use or security breaches becoming front of mind.
Apple is banking on the fact that their tribe is already used to paying a premium (i.e. recall the first $1,000 smartphone) and that father Cook will keep them the safest. It will be interesting to watch the up-take of this product.
Your turn! What are your thoughts? Has Apple actually changed the game with the Apple Card and its daily rewards program? Or have they merely initiated the turn?