Apple Card is About Apple, Not Credit

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 speaks3631606938?profile=RESIZE_710x 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 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. 


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  • Well done, Patti. I have seen a large number of people on Twitter say that they were not approved for the Apple Card. Some have even been brazen enough to post their high credit score. We know there are a number of factors that go into such a decision, but any insight--especially considering their goal is to have an Apple Card in every wallet? For example, I wonder if they see a certain competing card in your credit history if that could be factor?

    • Thanks for your feedback - it's interesting to think that a competing card could be a turn down factor, but that couldn't be an explicit reason (against regulations).  I think we always have to be careful to parse anecdotal evidence because we don't have insight into these very complicated scoring algorithims.  I think the looming issue for Apple and GS is how they're going to make money on these accounts.  Aside from interchange, which will essentially be eaten up with rewards, they need XX number of accounts to revolve a balance.  They may be redlining more high FICO scores because they tend to be higher non-revolvers.  We'll likely have a sense for this sometime later next year as the portfolio begins to settle down. 


  • Solid deck on the Apple Card.  Suggestion relative to the repeated call out of no bank issuer which is fundamental to game change.....Goldman Sachs is the issuer, Apple is the co-branded marketer with their hardware acting as an evolved form factor.  That to me is the fudamental innovation and disruption.  Oh, that an Goldman getting heavy into consumer banking without having to invest in retail branches

    • Appreciate your feedback.  I agree with your comment and get at the same conclusion believing that Apple has taken on the role of the issuer through their ability to control the value chain. 


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