- Apple’s new card is getting traditional banks worried but experts are asking if the card will actually beat the banks considering its high APR
- The financial products of most fintechs are better than what most banks offer
- A Bank of America exec said that there is nothing new about Apple’s new card
American television host Oprah Winfrey recently endorsed Apple’s new products Apple Arcade and TV Plus but the tech giant’s Apple Card is getting more attention than anticipated. Revolut, on the other hand, is still growing despite the bad publicity in the past few weeks. The challenger bank now has a client base of 3 million or more. Monzo is also gaining ground to the dismay of traditional financial institutions.
While challenger banks have already disrupted the market and continue to do so, Apple’s new card is reportedly making banks jittery especially because it has features that traditional banks can’t offer.
The card does not have an annual rate. It doesn’t even charge late, over-the-limit and international fees. It also has a well-thought-out cash back system and synchronises with iPhone’s wallet and maps.
The only problem with Apple’s credit card is its interest rate. The APR is hovering over 13 to 24%, according to the company.
Revolut’s revolutionary multiple currency card is also making waves, observers note. A great option for those who transfer money internationally on a regular basis, Revolut also offers cheap overseas transfer rates. As FX Compared reported this week, there is no news if Apple will venture into the remittance industry soon.
Observers note that Apple’s entry into providing credit signals what experts have been saying in Q4 last year or even before that — that the payments industry will enjoy steady growth. Apple is not alone as other companies are planning to add their own financial products. Instagram, for example, announced last week that it will be able to process payments soon, while Facebook is reportedly going to launch its own digital token.
Popular fintechs, such as the likes of Monzo and Revolut, are way ahead of the pack though as the latter allows withdrawals and spending abroad at interbank rates
Monzo, on the other hand, is a licensed bank that started as a prepaid card. Monzo’s app is known for its spending tracker, an element that Apple has included in its new card.
Fintech experts say that Apple’s entry into the finance market is not surprising since it already has Apple Pay. The only question among experts is whether the company will be able to replicate Apple Pay’s success.
Bank of America is not impressed with Apple’s Card though. "My reaction when I saw the announcement was, first competitively, all of the features that are in that card are offerings we have today", technology and operations chief Cathy Bessant said.
Bessant is not alone. Analysts from Apple Card partner Goldman Sachs said that there is a need to downplay the supposed innovation that the tech giant has created.
"We see new cards in the marketplace all the time", Bessant told reporters. "I think it's an interesting announcement. We'll pay a lot of attention to it."
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