12 votes

The Apple Card is a perfect example of Apple’s post-iPhone strategy

23 comments

  1. cptcobalt
    Link
    This sentiment gets thrown around a lot these days (particularly in contrast to Google, Facebook, etc.), but I don't think people actually weigh out what this really means—and I think this article...

    Effectively, Apple wants to be the only tech company you actually trust.

    This sentiment gets thrown around a lot these days (particularly in contrast to Google, Facebook, etc.), but I don't think people actually weigh out what this really means—and I think this article fails at that. Apple wears it's deep-standing care for privacy on its sleeve (though many are taking shots, supposing that Apple carefully dancing around the Goldman privacy language), but I think a huge amount of what "trust" means at Apple is also integrity and transparency. For example, on the Apple Card website, there is a lot of specific language about the transparency of interest charges and repayment, with the ring control that shows live-updating numbers as it is adjusted. Sure, anybody can calculate this by hand with their existing cards, but Apple is seeking transparency by being customer-forward with this—and thinks that this will help build trust. I think they're right.

    That may be enticing enough to get younger users, especially those without large stockpiles of reward points and years of credit built with existing banks and cards, to turn to Apple as their primary credit provider.

    This nails the target market. I can't see my parents using this card, and I have a hard time convincing myself that this card would get a reasonable amount of use, considering I already have an array of few special purpose cards to play the points game, and I don't know if I want to exchange 2% points for 2% cash back (depends on the expected return of these points).

    But I think a large amount of people, with average credit, with average spending, with average "rewards goals" will find this card to be quite worthwhile. And Apple's targeting them.

    15 votes
  2. [20]
    Algernon_Asimov
    Link
    Wow. That will not go down well here in Australia, where "tap and go" contactless cards are the most popular method of payment. Meanwhile, our Big Four banks have been dragging their heels on...

    the card, as reported by CNET, doesn’t have contactless capabilities like newer cards from competing banks,

    Wow. That will not go down well here in Australia, where "tap and go" contactless cards are the most popular method of payment.

    Meanwhile, our Big Four banks have been dragging their heels on signing up to Apple Pay. Three of them even tried to boycott Apple a few years ago, but the fourth big bank has been allowing its customers to use Apply Pay since 2016. The biggest of the Big Four banks started providing this service just two months ago - and the other two still holding back. The main reason is that Apple wants to charge excessive fees on transactions.

    Apple is really shooting itself in the foot with regard to the Aussie market: it won't provide the feature that most Aussies want ("tap and go" contactless card), and is overcharging for the feature it wants Aussies to adopt (Apple Pay digital wallet). Australians have a longstanding reputation for being early adopters of new technology, which means Apple is making its own life harder than it needs to be in a market that wants to adopt new technologies.

    3 votes
    1. [12]
      cptcobalt
      Link Parent
      The point is that you're using Apple Pay on device, not the physical card. Country differences aside, as I understand it, Apple Pay is better or otherwise equivalent to pure "tap and go"...

      Wow. That will not go down well here in Australia, where "tap and go" contactless cards are the most popular method of payment.

      The point is that you're using Apple Pay on device, not the physical card.

      Country differences aside, as I understand it, Apple Pay is better or otherwise equivalent to pure "tap and go" contactless. For example, with "tap and go" card-based contactless transactions, pin or signature entry is still required in these transactions. However, with Apple Pay, you are required to "pre-arm" your card on device (usually quickly double tapping a button while your device is unlocked), and therefore no pin or signature is required at the time of transaction (provided the merchant's terminal supports this, so not in all cases). If everything goes well, Apple Pay transaction velocity is faster than "tap and go", otherwise it's the same speed.

      In particular regard to Australia, this seems more to me like businesses not anticipating these fees as just the cost of doing business. When I visited New Zealand, I had to pay credit fees several times, and several transactions went quite weirdly because people were shocked that I was attempting to use Apple Pay and was willing to accept additional fees for credit. And, shortly following my trip, a NZ chain stopped accepting Paywave because it was unwilling to accept these fees. It's hard to understand why a business would trade a lower cost instead of an increased transaction velocity, lower consumer difficulty, and increased security.

      5 votes
      1. [5]
        Algernon_Asimov
        Link Parent
        No, it's an actual credit card, with a line of credit attached, provided by Goldman Sachs. It's not Apple Pay. It's a separate credit card. In Australia, that only applies for transactions over...

        The point is that you're using Apple Pay on device, not the physical card.

        No, it's an actual credit card, with a line of credit attached, provided by Goldman Sachs. It's not Apple Pay. It's a separate credit card.

        For example, with "tap and go" card-based contactless transactions, pin or signature entry is still required in these transactions.

        In Australia, that only applies for transactions over $100. Anything up to $99.99 is literally tap and go. The speed of paying by contactless card is identical to the speed of paying by a digital wallet stored in the NFC chip of a mobile phone; they use exactly the same technology.

        In particular regard to Australia, this seems more to me like businesses not anticipating these fees as just the cost of doing business.

        I'm not sure if you're talking about the banks or the retailers. The banks don't want Apple taking such a large slice of their income. Meanwhile, some retailers are adapting by charging an extra fee for tap-and-go transactions, because Visa and Mastercard charge higher fees for processing credit purchases than the fees that EFTPOS charges for processing purchases. And, it seems that Apple Pay's fees are even higher than the credit card companies' fees.

        5 votes
        1. cptcobalt
          (edited )
          Link Parent
          Retailers need to accept this as a cost of doing business—just raise the cost of goods/services provided in order to accept this. Accepting credit/contactless/paywave/Apple Pay/etc substantially...

          Meanwhile, some retailers are adapting by charging an extra fee for tap-and-go transactions, because Visa and Mastercard charge higher fees for processing credit purchases than the fees that EFTPOS charges for processing purchases. And, it seems that Apple Pay's fees are even higher than the credit card companies' fees.

          Retailers need to accept this as a cost of doing business—just raise the cost of goods/services provided in order to accept this. Accepting credit/contactless/paywave/Apple Pay/etc substantially increases transaction speed, whereas forcing cash/chip+pin/anything slower costs the business more in time and overhead. (I, as a consumer, actively choose to not go to destinations which don't accept Apple Pay—but this was extremely difficult to do while in NZ.)

          8 votes
        2. emdash
          Link Parent
          It is Apple Pay. It can be used as a contactless payment method, and it is transacted via Apple Pay. It's just a slightly different implementation method than everyone is used to (using...

          No, it's an actual credit card, with a line of credit attached, provided by Goldman Sachs. It's not Apple Pay. It's a separate credit card.

          It is Apple Pay. It can be used as a contactless payment method, and it is transacted via Apple Pay. It's just a slightly different implementation method than everyone is used to (using traditional Apple devices to perform a transaction), which has an associated line of credit.

          4 votes
        3. Fdashstop
          Link Parent
          Late, but you're both right. The card itself has no chip and it's not tap and go capable, but Apple intends for it to be the "backup," if that makes sense. Their end goal is that you use the app...

          Late, but you're both right. The card itself has no chip and it's not tap and go capable, but Apple intends for it to be the "backup," if that makes sense. Their end goal is that you use the app with their credit card for most scenarios, but if they don't accept tap and go, you still have the real card as a backup. That's why using the physical card only gives you 1% cash back, but using the app gives you 2% cash back.

          1 vote
        4. jackson
          Link Parent
          But the main goal is to drive more people to Apple Pay. You only get the 2% rewards tier for using Apple Pay. It even says "If you find a place that doesn’t take Apple Pay yet, there’s [the...

          No, it's an actual credit card, with a line of credit attached, provided by Goldman Sachs. It's not Apple Pay. It's a separate credit card.

          But the main goal is to drive more people to Apple Pay. You only get the 2% rewards tier for using Apple Pay. It even says "If you find a place that doesn’t take Apple Pay yet, there’s [the physical card]." Apple Pay is supposed to be the tap-and-go method in this case.

          Personally, I wouldn't feel comfortable carrying around a card with a chip that broadcasts all my payment info whenever it's outside of a RF wallet. Paying at restaurant just seems like your asking someone to life your details as the waiter passes by their table.

      2. [5]
        Elronnd
        Link Parent
        I don't know about AU, but in canada you only need those for transactions above a certain amount (set by the retailer, generally $100-200).

        with "tap and go" card-based contactless transactions, pin or signature entry is still required in these transactions

        I don't know about AU, but in canada you only need those for transactions above a certain amount (set by the retailer, generally $100-200).

        3 votes
        1. [3]
          loto
          Link Parent
          Huh, mine's always been $100 everywhere I've gone (also in Canada), I thought the bank set it? Or does it depend on the bank your card is from?

          Huh, mine's always been $100 everywhere I've gone (also in Canada), I thought the bank set it? Or does it depend on the bank your card is from?

          1 vote
          1. [2]
            Elronnd
            Link Parent
            It's $200 at costco. I guess $100 is a 'recommended' level so must just go with it, but costco has less fraud because of the entrance fee?

            It's $200 at costco. I guess $100 is a 'recommended' level so must just go with it, but costco has less fraud because of the entrance fee?

            1 vote
            1. loto
              Link Parent
              huh, somehow I missed this (even though I shop specifically at Costco a bunch)

              huh, somehow I missed this (even though I shop specifically at Costco a bunch)

      3. babypuncher
        Link Parent
        Apple pay basically offers two-factor authentication that regular tap and pay cards do not. (No, a signature is NOT a useful form of identification). It even beats debit cards with PINs since one...

        Apple pay basically offers two-factor authentication that regular tap and pay cards do not. (No, a signature is NOT a useful form of identification). It even beats debit cards with PINs since one of the two authenticators happens entirely outside the POS terminal, preventing a compromised checkout station from getting everything it needs to authenticate a purchase.

    2. [6]
      onyxleopard
      Link Parent
      As Apple pointed out in their presentation, Australia has 99% market adoption of Apple Pay already, so you should only need to use the actual card 1% of the time. The only time you’d need to use...

      As Apple pointed out in their presentation, Australia has 99% market adoption of Apple Pay already, so you should only need to use the actual card 1% of the time. The only time you’d need to use the physical card would be for instances where Apple Pay is not accepted or some strange situation where you have access to the card but not your phone. In the US, this is more of an issue, though, as Apple Pay has not saturated as deeply, so there are still plenty of places where you’ll need a card, esp. restaurants.

      4 votes
      1. [4]
        Algernon_Asimov
        Link Parent
        But, the point is that Aussies are used to tapping their cards - whether debit cards or credit cards. A credit card that won't "tap" is going to get very annoying very quickly. Also, a credit card...

        But, the point is that Aussies are used to tapping their cards - whether debit cards or credit cards. A credit card that won't "tap" is going to get very annoying very quickly.

        Also, a credit card accesses different funds than a digital wallet. If you're looking to buy something on credit, your Apple Pay is useless; you will whip out your Apple Card and then find it doesn't "tap" like just about every other card in Australia.

        1 vote
        1. [2]
          onyxleopard
          (edited )
          Link Parent
          Apple Pay is easier than tap to pay. The same problem that tap to pay tries to solve is solved by Apple Pay, and since Apple Pay uses TouchID or FaceID, it’s quicker and more secure. If anything,...

          A credit card that won't "tap" is going to get very annoying very quickly.

          Apple Pay is easier than tap to pay. The same problem that tap to pay tries to solve is solved by Apple Pay, and since Apple Pay uses TouchID or FaceID, it’s quicker and more secure. If anything, anyone who uses Apple Pay would be annoyed if they had to take out a credit card instead.

          If you're looking to buy something on credit, your Apple Pay is useless;

          The whole point is that anywhere that Apple Pay is accepted, you’ll be able to pay from your Apple Card using your phone. The Apple Card is literally just a backwards compatibility shim in case some vendor accepts credit cards, but not Apple Pay.

          Edit: You may be under the wrong impression of what Apple Pay currently is. I currently have both my debit card and my credit card linked to Apple Pay. Whenever a vendor accepts Apple Pay, I can already decide to pay from my checking account via my debit card, or from credit with my credit card. I already use this and it takes only a couple of seconds to complete transactions this way.

          5 votes
          1. Algernon_Asimov
            Link Parent
            Oh. I didn't realise you could use the Apple Pay feature to pay from the credit card. Thanks for explaining.

            You may be under the wrong impression of what Apple Pay currently is. I currently have both my debit card and my credit card linked to Apple Pay. Whenever a vendor accepts Apple Pay, I can already decide to pay from my checking account via my debit card, or from credit with my credit card.

            Oh. I didn't realise you could use the Apple Pay feature to pay from the credit card. Thanks for explaining.

            7 votes
        2. babypuncher
          Link Parent
          But Aussies would only be using the card at all in extremely rare cases, according to Apple). The entire appeal of the Apple Card is it's integration with the iPhone. If users don't want to use...

          But Aussies would only be using the card at all in extremely rare cases, according to Apple). The entire appeal of the Apple Card is it's integration with the iPhone. If users don't want to use their iPhone to pay, then there are plenty of credit cards better suited for them. 50% of the rewards are in fact dependent on making purchases using Apple Pay instead of the titanium card, making this an exceptionally poor choice for people married to using a physical card.

          Personally, tapping my phone is more convenient (and secure, IMO) than pulling a card out of my wallet. I just don't see how this will add unwanted friction.

      2. babypuncher
        Link Parent
        I'm imagining that those 1% of stores that do not accept Apple Pay also do not accept contactless cards. Apple made a big deal about the titanium card having as little identifying information as...

        I'm imagining that those 1% of stores that do not accept Apple Pay also do not accept contactless cards.

        Apple made a big deal about the titanium card having as little identifying information as possible, so that the only way to use it to authorize transactions is a physical swipe or chip read. This goes as far as not even printing the credit card number on the face of the card. Nefarious individuals could theoretically use an NFC reader to swipe card data from a contactless card right out of your wallet, a scenario I imagine Apple wants to avoid just as much as someone snapping a picture of the CC number.

        1 vote
    3. NaraVara
      Link Parent
      I think the idea is that you use the phone and the physical card is just an emergency backup where they don't take Apple Pay. And most of the places they don't take it are barbaric nations like...

      Wow. That will not go down well here in Australia, where "tap and go" contactless cards are the most popular method of payment.

      I think the idea is that you use the phone and the physical card is just an emergency backup where they don't take Apple Pay. And most of the places they don't take it are barbaric nations like the USA where the regulatory state is too weak to drag big, entrenched interests into the present.

      This parochialism is a general problem with Apple though, and it comes through in some of their weird design choices. On a very cold winter day once I got a phone call and realized the iPhone has no way answer a call without interacting with the screen. I had to take my glove off to answer it. This seemed like an uncharacteristic design oversight for a company that's normally so thoughtful. Then I turned the phone around and saw "Designed by Apple in California" and it made sense.

      Other fun oversights show up in the weather app. They don't think windchill or heat index are important enough details to display "above the fold," focusing only on chance of precipitation. Of course they do, because in Northern California those aren't usually as relevant as they would be in Wisconsin or Florida. They don't have UV like you probably care about in Australia or New Zealand. They don't have air quality warnings like you might want in Beijing. They have them all, but you have to scroll down past the 5 day forecast to see them.

      3 votes
  3. Deimos
    Link
    TechCrunch had an article today with some more detail: How Apple Card Works

    TechCrunch had an article today with some more detail: How Apple Card Works

    1 vote
  4. json
    Link
    Financial services. It's inevitable when a company realises they have more money than they can use to make products or distribute to shareholders.

    Financial services. It's inevitable when a company realises they have more money than they can use to make products or distribute to shareholders.