- Apple just launched a new card in partnership with banking giants Goldman Sachs and Mastercard
- Traditional banks are reportedly dismayed that the tech company is entering finance
- Apple promises would-be customers that they will have healthier finances if they use their product
American tech giant Apple will be joining the financial sector very soon after years of speculation as to whether big tech firms will ever enter this domain. Although Apple has not yet announced whether it also wants to enable would-be users to transfer money internationally, this huge market is projected to make billions by 2020. Traditional players are reportedly dismayed about the new Apple Card that the company recently launched in partnership with Goldman Sachs and Mastercard.
The nightmares of traditional players are now finally real as Apple ventures into banking. Banks often charge exorbitant fees and due to their overseas transfer rates, have gotten a lot of competition from challenger banks such as Revolut and TransferWise. The news of Apple’s card will threaten the industry, experts say. Apple started dabbling into finance with Apple Pay and the company reportedly wants to replicate its success. Apple reportedly promised to provide a “healthier financial life” to would-be cardholders. The card will offer cashbacks on all transactions which users will receive on a daily basis.
The rewards programme is a feature that challenger banks have integrated with their credit products and something that Apple would also like to leverage. Apple Pay’s Vice President Jennifer Bailey said that the company wants customers to have “a better understanding of their spending so they can make smarter choices with their money, transparency to help them understand how much it will cost if they want to pay over time and ways to help them pay down their balance.”
Customers in the United States can sign up for the new card on their iPhones in six months' time, according to the company. The sign-up sheet can be found right on the Wallet app. The firm notes that users will be able to use Apple Pay right away upon sign up. Although traditional banks now have credit card sign up features online, they do not provide immediate credit. This is what makes Apple Card different, observers explain. Other challenger banks have failed to minimise the process of activating their credit products. Challenger bank Tandem, for example, makes the customer wait for their card and said customers will need to activate it through the mobile app followed by an ATM activation.
Apple said that it has made it possible to reduce payment friction with its Apple Pay product, noting that paying using mobile phones is “already a thing”. Apple believes that there will be strong interest in their new card.
Apart from the credit card, Apple will also start offering categorisation of payments made by its users so that they know just how much they are spending on certain things, such as food and drinks or shopping and entertainment. The company will also provide spending summaries to would-be clients, the firm noted Monday.
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