In the annals of Apple, 2019 will be remembered as the year of the great pivot, a gigantic change of strategy that is transforming the Cupertino Company from a company that produces hardware to a service company. The indicators of this epochal change were already evident for some time, but Apple finally discovered the cards in March, with a special event that showed Apple TV +, Apple News +, Apple Arcade, and above all the Apple Card. I say "above all" in reference to the new credit card marked Apple because, of all new services that the company is about to manage, it is the one that best embodies the turn in progress in Cupertino. Apple Card also promises to mess up the cards of the rich digital payments sector.
Launched on August 20th, customers will be able to request it through the iPhone Wallet app and use it with Apple Pay waiting for them to get their physical card at home. The Apple Card can be used both as a traditional credit card (it was launched in partnership with Goldman Sachs and Mastercard) and through the Apple Pay proprietary circuit. What peculiarity could make it more appealing to customers than traditional credit cards? Apple offers cash back for purchases: in other words, it gives you back some of the money spent. It's called "Daily Cashback" and of course it applies to cheaper rates in case of purchases made with Apple Pay: the cashback is 2% if the proprietary circuit is chosen, while it goes down to 1% for all the other categories of expenditure made with physical paper.
The Apple Card is a real credit card, with which you can make online and offline payments. As such it works with a credit system that provides for the payment of the monthly balance, with interest on the overdraft in case of delayed payment. Unlike traditional credit cards, however, it is conceived as a purely virtual card that resides in the user's iPhone Wallet, to which it is linked by a double thread. There is also a beautiful physical titanium card that can be ordered separately at no additional cost and that is mainly used for POS purchases not enabled for contactless payment (the circuit is MasterCard, accepted worldwide).
Apple has eliminated the card number, the CVV code (the three-digit security number usually printed on the back) and the PIN, all elements so far considered indispensable on any credit card but superfluous for a product like the Apple Card, which will be managed - from the opening request to the payment of the balance - only through the iPhone Wallet app. The proceeding has already been widely documented online in recent days after Apple started the first round of preliminary registrations in view of the final launch of the service scheduled for the end of August.
Apple Card does not include any opening or maintenance costs but provides - like all major credit cards - interest on the balance in the event of non-payment within the set time (APR rates range from 12.99% to 23.99%, based on the credit score, i.e. the score credit rating of the applicant). The average Italian consumer may seem strange, but in the United States, the late payment of a credit card balance is a very common practice, as is the condition of prolonged exposure of the balance, because the cards are used as permanent financing systems. The payment can be made with a normal charge subject to termination on the current account (which can be automated) or by scaling the amount due from your Apple Cash balance.
Apple Card also provides a cash-back system, i.e. it offers a cash return on every purchase made. Cashback can guarantee considerable savings if used intelligently and is very common in America. Less in Europe and especially in Italy, where instead debit cards (trivially: ATMs, which subtract the amount to be paid from a current account in, near real-time) and prepaid cards continue to be more common.
With cash back, you get back a percentage of the expense in the form of points or more rarely of money. Also, in this case, the Apple Card offers an interesting advantage: the amounts are returned daily (Apple calls these transactions Daily Cash), they are immediately visible in the expense report available on the iPhone. Moreover, the money is immediately expendable. The percentages are in line with the American credit card market: 3% for purchases of Apple products at the Apple Store, on the Apple Store online on the App Store or on iTunes, 2% for all purchases made through Apple Pay, 1% on all purchases made with the physical card on the MasterCard circuit.
What is obvious from the first reports published online about the procedure for opening the card, is that the most important advantage of the Apple Card is not the "rewards" but the design of the service, naturally understood not only in the aesthetic sense but above all in functional terms.
User Experience – The User Experience of the Apple credit card is extremely simplified and lacks the bureaucratic complications associated with the request for a payment instrument. The verification of the credit status of the applicant is very fast and the whole procedure is summarized transparently in the Wallet app. Once the request is approved - in some cases just a few minutes - the user can start using the card immediately. And it is precisely in everyday use that the Apple Card differs from the experience of other digital cards that rely on dedicated apps for managing the budget. All expenses and sums received through cashback are shown in real time with automatically generated graphs showing, through a color code, the type of expenses made during the month. The other particularly interesting aspect is Apple's ethical choice to encourage the user to maintain a good "financial health”, with the containment of expenses and overdraft and regular payments of the balance to avoid interest.
Security – The other fundamental aspect is the security of the payment device. It will seem trivial, but the absence of a card number and physical support minimizes the possibility of data transcription and theft or cloning, as well as adding an additional security layer via Face ID or Touch ID at the time of payment. Even the physical titanium card does not report key information and in case of loss (in addition to being blocked immediately by the app), it does not allow us to appropriate data useful for making unauthorized payments.
Overall, Apple Card is, therefore, one of the most important innovations announced by the company this year in the area of services. But despite our opinion, the outlook on the future of Apple's first real banking product is extremely positive in terms of growth and user lock-in. In the ecosystem, there is a fundamental criticality in the future global roll-out. Those who have been following Apple for at least ten years are familiar with the US-centric nature of the Apple strategies: Cupertino products are almost always born with the American market in mind and then only later adapted to other markets. If in the hardware and software field these are adaptations that can be managed with consolidated localization processes, for the services the question becomes more complicated and does not concern only a linguistic adaptation or the stipulation of new licenses. In many cases a "cultural translation" process of the product is necessary.
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