Apple Inc and Goldman Sachs Group Inc are joining forces in the consumer credit business, launching the Apple Card credit card for iPhones.
The card is tied to Apple Pay, a service that allows people to load banking information and pay in store or use it for purchases online. It works globally where Apple Pay is accepted, lets users track spending in the Wallet app, and focuses on transaction privacy. The card also includes a cash back program for rewards, including 2 percent cash back on all Apple Card purchases and three per cent on purchases made at the Apple Store or with services like the App Store.
The card excludes common charges like annual, foreign-transaction and late fees, Jennifer Bailey, Apples vice president of Apple Pay, said. Apple and Goldman Sachs will not share the user’s data with partners and advertisers. Apple will also offer titanium credit cards with laser etching for places where Apple Pay is not accepted. The physical Apple Card does not have a card number, further encouraging users to use the card with Apple Pay.
Apple and Goldman are entering the intensely competitive field of consumer credit, where banks have been shelling out costly rewards to encourage consumers to spend through their cards. Banks, which collect a fee from merchants each time a consumer swipes their card at checkout, have been eager to grow their card businesses in recent years and have benefited from low default rates.
To create a credit card as innovative as Apple Card, we needed a bank that was willing to do things that had never been done in the industry before so we partnered with Goldman Sachs, Bailey said on Monday. As a newcomer to consumer financial services, Goldman was up for the challenge of doing something more bold and innovative.
The Apple Cards 2 per cent cashback isnt one of the richest cards to debut in recent years. The Apple Cards rewards are similar to those offered by Citigroup’s Double Cash card and PayPal Holdings Inc’s Cashback Mastercard. Apple Card users will receive their cash-back rewards on a daily basis instead of at the end of each billing cycle.
Apple will not know what consumers bought, where they made purchases or how much a consumer spent with Apple Card, which will run on the Mastercard network, Bailey said on Monday.
Apple is not new to digital payments. Apple Pay Cash is a virtual debit card of sorts that lets users transfer money over iMessage and can also be used as a tap-to-pay tool in stores. Apple partnered with Green Dot Bank for that service and has long offered a credit card with Barclays for Apple hardware purchases.
Still, the push into consumer credit cards is a major advancement for Apples payment-related initiatives. Apple made a big splash with Apple Pay in 2014 when it struck partnerships with payment networks like American Express and Visa.
Source: The Hindu