Currently, I'm working on a presentation for an issuer group who asked me to help them better understand the Apple Card. Looking forward to presenting my ideas in more depth, but for this blog I just want to leave you with one thought: It's not about the credit.
Yes, Apple is looking to penetrate its iPhone user base to the deepest extent possible. Appealing to the masses, the panache (however temporary) of having an Apple Card can't be denied. The app is slick, the experience is all Apple, and for many people, the rewards are just fine.
For me, this strategy speaks to what has been and will continue to be, the main competitive arena of our next generation fintech products. I've written about it many times in the past and it is now becoming more and more apparent - the criticality of owning or controlling as much of the value chain as possible IN ORDER TO become the centralizing agent for financial services.
For example, the feature/function of the Apple Card not only lends itself to better debt management, but also to using this as a "pay now" account. In other words, a debit account through its...wait for it...pay now feature. In my opinion, this is the deepest Apple has gotten in penetrating our every day lives with a financial services product. The Apple Card functions as a payment account and consumers will figure that out in pretty short order.
Once they do and if Apple gets enough of them to enable the separate, but important Apple Cash Card, in their app, it's not a big stretch to imagine Apple enabling payroll deposits for example.
This is the big threat for traditional financial institutions and their depository accounts, not the credit card. Apple doesn't quite have all the puzzle pieces in place yet, but the Apple Card has pushed their strategy way down the road.