Abu Dhabi, UAEMonday 14 October 2019

Apple Card comes to American iPhones - your questions answered

Through partnerships with Goldman Sachs and Mastercard, the technology giant is looking to entice customers

Jennifer Bailey, vice president of Apple Pay, speaks during the launch of Apple Card in Cupertino. Bloomberg
Jennifer Bailey, vice president of Apple Pay, speaks during the launch of Apple Card in Cupertino. Bloomberg

Marking its first foray into financial services, Apple rolled out Apple Card on Tuesday to some US iPhone users as the technology giant looks to diversify from product sales.

Through partnerships with Goldman Sachs and Mastercard, the technology giant is looking to entice customers with 2 per cent cash back on purchases on the credit card through its Apple Pay service, no fees and an app to track spending.

Apple did not respond to The National's request for comment on when its credit card will be available outside the US. Goldman Sachs chief executive Richard Gnodde said the bank is actively exploring introducing the card in international markets when it was first announced in March, but did not elaborate.

What is Apple Card?

Apple Card is a credit card that will be available to all US iPhone users who apply and are approved for a line of credit via the Wallet app.

Apple Card will be linked to Apple Pay – a mobile payment service that was launched in 2014 and currently has 50 million users in the US. The company said a limited number of people who had expressed interest in Apple Card would start receiving sign-up invitations on Tuesday.

The card is "smart" - using artificial intelligence and Apple Maps to show transactions with merchant names and locations.

Transactions are organised by colour-coded categories such as food, shopping and entertainment and statements provide weekly and monthly expenditure reviews. The card has no annual fees, late fees or foreign transaction charges and zero penalties for missing payments.

Why is Apple - a tech company - offering a credit card?

The company is partnering with American investment bank Goldman Sachs to support it in issuing Apple Card. This is the first time Goldman has issued a consumer credit card. Apple has also joined hands with financial services giant Mastercard to provide a global payments network and handle payment processing worldwide.

Annette Zimmermann, vice president and analyst at Gartner, told The National it was impressive that Apple managed to line-up partnerships with big names before launching Apple Card.

“It exemplifies very interesting business dynamics. Mastercard is obviously one of the competitors in this segment, so there must be some kind of strong value exchange between the two companies. Using Mastercard’s global network to let people pay is remarkable,” Ms Zimmermann said.

Apple Card will be a new revenue driver as the company ramps up its services offerings, she added.

Gene Munster, managing partner with Loup Ventures, told Reuters that the card's adoption is likely to be low in the first year, but it could generate about $1.4 billion (Dh5.1bn) of high-margin revenue by 2023.

That would add about 1.8 per cent to Apple's overall earnings and complement the much larger Apple Pay business for total payments revenue of $5.38bn by 2023.

How do you sign up for Apple Card?

So far only US customers can apply for Apple Card in the Wallet app on their iPhone and start using it instantly.

Is there a physical card as well?

To cover those locations where online or Apple Pay transactions are not accepted, customers can use a physical titanium Apple Card for purchases. It has no card number, CVV code or expiration date.

Updated: August 7, 2019 03:04 PM

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