Flashy introductions touting world shattering, high-tech, gee whiz, holy cow demonstrations of almost magical performance have been the typical approach of Apple when revealing their newest products. The flash of the reveal has consistently been trumped only by loyal consumers’ responses. The recent introduction of Apple’s foray into the financial services sector was expected to be received with the typical enthusiasm awarded to past product introductions, but the initial response has fallen short of expectations. Perhaps it is the usual, ho-hum response typically afforded product introductions from the financial industry. Let’s face it, financial products generally are not described as sexy and disruptive.
Apple’s long-awaited introduction of the “Apple Card” made its debut with the company’s usual flare and promise. The effort is a partnership with Goldman Sachs, who is making its first offering in the credit card world, and MasterCard. Apple Card is built into the Apple Wallet app on iPhone, offering customers a familiar experience with Apple Pay and the ability to manage their card right on iPhone. While Apple is playing up the card’s benefits of no annual or late fees, no over the limit fees or international surcharges, the card’s cash back features have been described as underwhelming by critics and early consumers. The interest rates, dependent upon a cardholder’s qualifications, appear to be in-line with the current financial industry’s best offerings. The card does not contain a credit card number, expiration date or CVV security code, instead featuring facial and touch identity capabilities. The card is tied to Apple Pay, a service that lets people 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.
But the new offering may be destined to receive a similar response from consumers as Apple Pay. First introduced five years ago, Apple Pay has struggled to capture a modest two percent of the credit transaction market dominated by MasterCard and Visa. “It’s just easier to use card payments,” said Harshita Rawat, an analyst at Sanford C. Bernstein & Co. “Mobile payments need to evolve their value proposition to get consumers to switch from their plastic card payments. This new offering Apple Card is a step towards that but it needs to evolve even further.” Apple appears to be banking on the new Apple Card and the “Z” generation to boost Apple Pay acceptance. Jeff Fromm, author of “Marketing to Gen Z” and a partner at agency Barkley, says, “Gen Z is going to ‘hashtag’ Apple love this card.”
Whether on a revolutionary or evolutionary path, the Apple Card is already having an impact on the established players in the credit card market. Competitors are investigating advantages like privacy protection, no card numbers and advanced security features. And while credit cards may not be sexy, there is a certain amount of cool factor to the Apple Card for all those loyal Apple fans. “Although the Apple card’s rewards aren’t too exciting, it might bring more value to its already loyal customers in the form of convenience and security,” says Jill Gonzalez, an analyst at finance site WalletHub. “When using the card via Apple Pay, users will quickly be able to see where and how they spend their money without the use of a third-party app.”
For Apple, the journey into a field less traveled and experienced contains more than a little mystery and intrigue. Will the brand’s magical touch of the past be repeated? It appears that even for a veteran like Apple, only time will tell.