Opinion: Apple Card highlights disruption potential for tech industry

Bob O'Donnell

Staff member
<div class="bbWrapper"><p><img src="https://static.techspot.com/images2/news/bigimage/2019/03/2019-03-26-image-8.jpg"></p>

<p>Yes, a physical credit card, but more importantly, the virtual credit card services that are the latest extension to Apple Pay. In multiple ways, Apple Card is a great expression of what Apple does best. They find things that create pain points in our lives and make them much simpler by essentially reinventing them and how we interact with them.</p>

<p>Of course, there was hope that they would do the same with TV content and services, too. But while it’s too early to say for sure, my initial take is that they weren’t quite as successful there. Sure, the new Apple TV+ app looks nice and integration with a number of partners looks good, but there are several TV content aggregators already out there. Plus, to get the kind of comprehensive package Apple promised, you have to get local news and sports from one source, movies from iTunes and/or other streaming services, and then Apple’s content as well. Oh, and if you’re a fan of content from Netflix or if you like to watch TV content on Android devices or Windows PCs, you’re out of luck. That’s a lot of work and compromises for what’s supposed to be a complete service that works across “all your screens.”</p>

<p>On top of that, though it went by very quickly, I could’ve sworn I briefly saw a $10.99 monthly price for the ShowTime service that was added during the demo—not the $9.99 that had been expected. So, lots of pricing questions still remain—not the least of which is how much Apple will charge for their own original content.</p>

<p>In the case of Apple Card, however, the value proposition was much more straightforward, and the end product much more appealing as a result. Not only did Apple promise to rid people of dreaded fees associated with credit cards—late fees, international charge fees, etc.—they also completely rethought the experience of using a credit card. The software-based app experiences enabled via Apple Card range from leveraging on-device machine learning to easily label charges, to providing practical insights on how to reduce interest charges, to logical organization of charges and trends in spending. They also integrated strong privacy and security by requiring biometric recognition for all charges (via face or fingerprint recognition), tying transactions to the secure ID inside the iPhone, and keeping everything anonymized to prevent tracking of purchases. All told, it was the best example of the old Think Different Apple philosophy that I’ve seen in some time.</p>

<p class="side-quote">As big companies in other non-tech industries are going through what many like to call “digital transformation” and morphing into tech-driven organizations, tech companies are starting to look the other direction. They’re observing these trends in traditional industries and recognizing that those industries are now even more ripe for disruption than ever.</p>

<p>Not only that, but Apple even managed to sneak in a tiny bit of hardware into Apple Card via the titanium physical credit cards that they’re making part of the offering for those locations that don’t take Apple Pay. While you can argue it was a bit over the top, it was classic Apple in the best way, with even the tiniest details done right. (Or, as I joked with others, more proof that Apple still does hardware best….) The cards have no number or expiration date—just your named etched into them. Frankly, if I was part of another credit card company, I’d be nervous, because Apple completely reset the bar on what people are going to start expecting from a credit card.</p>

<p>In that regard, the Apple Card launch was also a great example of another broader phenomenon that we’re starting to see play out, something I’ll call “reverse transformation.” As big companies in other non-tech industries are going through what many like to call “digital transformation” and morphing into tech-driven organizations, tech companies are starting to look the other direction. They’re observing these trends in traditional industries and recognizing that those industries are now even more ripe for disruption than ever. By applying their “digital” expertise towards problems that have plagued or limited those traditional industries, and applying a fresh perspective to those issues, tech companies are becoming very real threats in industries that, just a few years back, seemed very far removed from tech. In effect, they’re taking advantage of an opportunity that didn’t exist until these other industries started to digitize themselves.</p>

<p>To be clear, not all industries are necessarily subject to this reverse transformation, nor are all tech companies equipped to take advantage of these new potential opportunities. But as Apple is starting to demonstrate with Apple Card, the possibility of digital transformations creating more risks for traditional industries and companies than many originally thought are very real. These types of changes won’t happen overnight, nor will Apple Card immediately disrupt the entire credit card industry, but the possibility of dramatically new tech industry-inspired services are clearly an interesting new possibility for us all to consider.</p>

<p class="grey">Bob O’Donnell is the founder and chief analyst of <a href="http://www.technalysisresearch.com/" target="_blank">TECHnalysis Research, LLC</a> a technology consulting and market research firm. You can follow him on Twitter <a href="https://twitter.com/bobodtech" rel="author" target="_blank">@bobodtech</a>. This article was originally published on <a href="https://techpinions.com/apple-card-highlights-disruption-potential-for-tech-industry/54716">Tech.pinions</a>.</p>
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GreenNova343

Posts: 440   +330
So with no card numbers how do you make purchases online/over the phone?
An Apple account, most likely.
Which only works if the retailer accepts Apple Pay, something which is still nowhere near universally accepted. Heck, there are retailers that won't accept particular cards (I.e. those old "...and they don't take American Express" commercials), or won't accept cards that are from other countries.

It's funny, though, if you look at what they touted in their event:
-- "Pay down your balance". Really? Wow, such a new concept that someone might actually try to pay down their credit card balance, or that []bno one[/b] in the world has ever considered making sure their credit card balance was paid off on a monthly basis /sarcasm.
-- "Send to friends". Oh, wait, that's right: PayPal already had that (& even Papa John's lets you share your pizza order between multiple people), but now it's "innovative" because Apple's jumping on the bandwagon?
-- "Use in apps & on the web". Ah, yes, because no one has ever been able to use a credit card to make purchases on the Web or through an app...
-- "Spend in stores". Again, never thought I'd be able to do that with a credit card...
-- "Weekly & monthly summaries". Again, never heard of a credit card able to provide you a monthly statement before, or that a card provider's online banking site/app might provide you with a weekly (or even a daily) balance...

And, of course, let's consider the itty-bitty print for the caveats they have (just like every other bank & credit card provider out there), straight from https://www.apple.com/apple-card/:

1. The biggest caveat of all: eligibility is subject to credit approval. Just like with any other credit card, if you don't have good credit, you won't qualify. Although, to be honest, even people with bad credit can usually get a credit card...they just usually have a low credit limit and/or a high interest rate they'll be subject to. And it looks like, just like every other credit card, there will be a limit on how much you can spend through Apple Card, because...
2. Their "Daily Cash" thing (I.e. "getting cash back on your purchases") is limited by the credit limit.
3. Plus, it also states "Daily Cash is subject to exclusions, and additional details apply. See the Apple Card Customer Agreement for more information." And they both mention that you have to have an Apple Card for it, but then state that if you don't you can still apply it to your balance...which is a bit schizophrenic if you think about it (either you need a card or you don't, but you can't have it both ways).
4. They may not have "late fees", but their interest rates are pretty much the same as any other credit card...& again will depend probably quite a bit on your credit score. As for "no fees"...well, I know with my credit card there are very few actual fees involved -- there's a "late fee" if I don't pay on time, but I generally either pay it off in full every month or at least paid well more than the minimum required payment so I don't have to worry about that fee; I usually don't have "foreign transactions" unless I've traveled out of the country; & since I only have the 1 credit card I'm not transferring balances. So "no fees" doesn't really bring that much of a benefit to me.
5. There may not be a late fee, but just like every other credit card out there, you'll have additional interest accrue if you don't pay by the due date. There just isn't the extra fee tacked on.
6. Their "this is the amount of interest you'll owe on your purchase" is nothing more than an estimate based on your current balance. It doesn't include pending transactions (which might include the transaction you just did), let alone any future transactions before the end of the billing cycle. So its usefulness as a planning tool is extremely limited.

But the biggest lie told in their presentation is that there's no bank/credit card companies involved...because they end up contradicting themselves, not once but twice (https://www.zdnet.com/article/meet-apple-card-no-late-fee-apple-becomes-a-bank/) (https://www.zdnet.com/article/apples-services-event-rushed-nebulous-and-goldman-sachs-frankly-im-nonplussed/). First, MasterCard is providing their tech (including the chip in the physical card), as well as giving them the global access they need to allow collection in other countries, so they're involving an existing credit card company. Second...they picked Goldman Sachs as the bank to issue the card through...because Apple isn't a bank, but needed a bank partner to meet regulatory requirements. And as that 2nd article says, of all the banks they could have picked, they chose Goldman Sachs as their partner, because they have such a stellar reputation for honesty.

TL:DR version: there're no new features with this that weren't already available through other providers, & their choice of banking partner does not inspire confidence regarding ethics or accountability.
 
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ForgottenLegion

Posts: 456   +450
An Apple account, most likely.
Which only works if the retailer accepts Apple Pay, something which is still nowhere near universally accepted. Heck, there are retailers that won't accept particular cards (I.e. those old "...and they don't take American Express" commercials), or won't accept cards that are from other countries.

It's funny, though, if you look at what they touted in their event:
-- "Pay down your balance". Really? Wow, such a new concept that someone might actually try to pay down their credit card balance, or that []bno one[/b] in the world has ever considered making sure their credit card balance was paid off on a monthly basis /sarcasm.
-- "Send to friends". Oh, wait, that's right: PayPal already had that (& even Papa John's lets you share your pizza order between multiple people), but now it's "innovative" because Apple's jumping on the bandwagon?
-- "Use in apps & on the web". Ah, yes, because no one has ever been able to use a credit card to make purchases on the Web or through an app...
-- "Spend in stores". Again, never thought I'd be able to do that with a credit card...
-- "Weekly & monthly summaries". Again, never heard of a credit card able to provide you a monthly statement before, or that a card provider's online banking site/app might provide you with a weekly (or even a daily) balance...

And, of course, let's consider the itty-bitty print for the caveats they have (just like every other bank & credit card provider out there), straight from https://www.apple.com/apple-card/:

1. The biggest caveat of all: eligibility is subject to credit approval. Just like with any other credit card, if you don't have good credit, you won't qualify. Although, to be honest, even people with bad credit can usually get a credit card...they just usually have a low credit limit and/or a high interest rate they'll be subject to. And it looks like, just like every other credit card, there will be a limit on how much you can spend through Apple Card, because...
2. Their "Daily Cash" thing (I.e. "getting cash back on your purchases") is limited by the credit limit.
3. Plus, it also states "Daily Cash is subject to exclusions, and additional details apply. See the Apple Card Customer Agreement for more information." And they both mention that you have to have an Apple Card for it, but then state that if you don't you can still apply it to your balance...which is a bit schizophrenic if you think about it (either you need a card or you don't, but you can't have it both ways).
4. They may not have "late fees", but their interest rates are pretty much the same as any other credit card...& again will depend probably quite a bit on your credit score. As for "no fees"...well, I know with my credit card there are very few actual fees involved -- there's a "late fee" if I don't pay on time, but I generally either pay it off in full every month or at least paid well more than the minimum required payment so I don't have to worry about that fee; I usually don't have "foreign transactions" unless I've traveled out of the country; & since I only have the 1 credit card I'm not transferring balances. So "no fees" doesn't really bring that much of a benefit to me.
5. There may not be a late fee, but just like every other credit card out there, you'll have additional interest accrue if you don't pay by the due date. There just isn't the extra fee tacked on.
6. Their "this is the amount of interest you'll owe on your purchase" is nothing more than an estimate based on your current balance. It doesn't include pending transactions (which might include the transaction you just did), let alone any future transactions before the end of the billing cycle. So its usefulness as a planning tool is extremely limited.

But the biggest lie told in their presentation is that there's no bank/credit card companies involved...because they end up contradicting themselves, not once but twice (https://www.zdnet.com/article/meet-apple-card-no-late-fee-apple-becomes-a-bank/) (https://www.zdnet.com/article/apple...lous-and-goldman-sachs-frankly-im-nonplussed/). First, MasterCard is providing their tech (including the chip in the physical card), as well as giving them the global access they need to allow collection in other countries, so they're involving an existing credit card company. Second...they picked Goldman Sachs as the bank to issue the card through...because Apple isn't a bank, but needed a bank partner to meet regulatory requirements. And as that 2nd article says, of all the banks they could have picked, they chose Goldman Sachs as their partner, because they have such a stellar reputation for honesty.

TL:DR version: there're no new features with this that weren't already available through other providers, & their choice of banking partner does not inspire confidence regarding ethics or accountability.
Revolutionary XD

Watch the sheep go mental over it. I know the writer of this article is already salivating at the very prospect of even applying.
 
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Mikael_r

Posts: 18   +20
An Apple account, most likely.
Which only works if the retailer accepts Apple Pay, something which is still nowhere near universally accepted. Heck, there are retailers that won't accept particular cards (I.e. those old "...and they don't take American Express" commercials), or won't accept cards that are from other countries.

It's funny, though, if you look at what they touted in their event:
-- "Pay down your balance". Really? Wow, such a new concept that someone might actually try to pay down their credit card balance, or that []bno one[/b] in the world has ever considered making sure their credit card balance was paid off on a monthly basis /sarcasm.
-- "Send to friends". Oh, wait, that's right: PayPal already had that (& even Papa John's lets you share your pizza order between multiple people), but now it's "innovative" because Apple's jumping on the bandwagon?
-- "Use in apps & on the web". Ah, yes, because no one has ever been able to use a credit card to make purchases on the Web or through an app...
-- "Spend in stores". Again, never thought I'd be able to do that with a credit card...
-- "Weekly & monthly summaries". Again, never heard of a credit card able to provide you a monthly statement before, or that a card provider's online banking site/app might provide you with a weekly (or even a daily) balance...

And, of course, let's consider the itty-bitty print for the caveats they have (just like every other bank & credit card provider out there), straight from https://www.apple.com/apple-card/:

1. The biggest caveat of all: eligibility is subject to credit approval. Just like with any other credit card, if you don't have good credit, you won't qualify. Although, to be honest, even people with bad credit can usually get a credit card...they just usually have a low credit limit and/or a high interest rate they'll be subject to. And it looks like, just like every other credit card, there will be a limit on how much you can spend through Apple Card, because...
2. Their "Daily Cash" thing (I.e. "getting cash back on your purchases") is limited by the credit limit.
3. Plus, it also states "Daily Cash is subject to exclusions, and additional details apply. See the Apple Card Customer Agreement for more information." And they both mention that you have to have an Apple Card for it, but then state that if you don't you can still apply it to your balance...which is a bit schizophrenic if you think about it (either you need a card or you don't, but you can't have it both ways).
4. They may not have "late fees", but their interest rates are pretty much the same as any other credit card...& again will depend probably quite a bit on your credit score. As for "no fees"...well, I know with my credit card there are very few actual fees involved -- there's a "late fee" if I don't pay on time, but I generally either pay it off in full every month or at least paid well more than the minimum required payment so I don't have to worry about that fee; I usually don't have "foreign transactions" unless I've traveled out of the country; & since I only have the 1 credit card I'm not transferring balances. So "no fees" doesn't really bring that much of a benefit to me.
5. There may not be a late fee, but just like every other credit card out there, you'll have additional interest accrue if you don't pay by the due date. There just isn't the extra fee tacked on.
6. Their "this is the amount of interest you'll owe on your purchase" is nothing more than an estimate based on your current balance. It doesn't include pending transactions (which might include the transaction you just did), let alone any future transactions before the end of the billing cycle. So its usefulness as a planning tool is extremely limited.

But the biggest lie told in their presentation is that there's no bank/credit card companies involved...because they end up contradicting themselves, not once but twice (https://www.zdnet.com/article/meet-apple-card-no-late-fee-apple-becomes-a-bank/) (https://www.zdnet.com/article/apple...lous-and-goldman-sachs-frankly-im-nonplussed/). First, MasterCard is providing their tech (including the chip in the physical card), as well as giving them the global access they need to allow collection in other countries, so they're involving an existing credit card company. Second...they picked Goldman Sachs as the bank to issue the card through...because Apple isn't a bank, but needed a bank partner to meet regulatory requirements. And as that 2nd article says, of all the banks they could have picked, they chose Goldman Sachs as their partner, because they have such a stellar reputation for honesty.

TL:DR version: there're no new features with this that weren't already available through other providers, & their choice of banking partner does not inspire confidence regarding ethics or accountability.
Revolutionary XD

Watch the sheep go mental over it. I know the writer of this article is already salivating at the very prospect of even applying.
I know right? My Tangerine credit card is able to track and categorize all of my purchases just like this 'revolutionary' apple card. I bet once the card goes public there will be articles about how this apple card bends in wallets just like their latest iPhones.
 
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ForgottenLegion

Posts: 456   +450
I know right? My Tangerine credit card is able to track and categorize all of my purchases just like this 'revolutionary' apple card. I bet once the card goes public there will be articles about how this apple card bends in wallets just like their latest iPhones.
Well then in that case there is clearly an issue...
The people are carrying the card incorrectly ;P

The card will be designed and engineered to perfection. Anything that appears to be wrong is a case of user error which can be dealt with by the customer purchasing a new device and attending an educational course provided at the genius bar for an introductory price of $99. After which you will receive a validation certificate which confirms you have mastered the Apple trademarked and patented device holster grip (essentially holding and storing an object).

Maybe I shouldn't give them ideas but this is the richest company in the world which sheep continually support for reasons which still baffle me.
 

J2018

Posts: 7   +4
It would be silly for them to sell a case for the card, right??
Maybe a tempered glass card protector... nah, that’s stupid, right?