Financial News

How Apple Card is Revolutionizing The Credit Card Market

EPF Last Update: May 30, 2020

When Apple first announced it was launching its very own credit card, loyalists and skeptics took notice. Designed with transparency and privacy in mind, the credit card was meant to help consumers lead a healthier financial lifestyle.

And with no fees, low interest and daily cashback right at your fingertips, the Apple Card is disrupting the way traditional issuers do business.

Apple Digital First Experience

Unlike traditional credit cards that try to win customers by marketing high rewards and promises of low APRs, the Apple Card combines the safety of a traditional credit card with the digital features that Apple users know and love.

Through Apple’s Wallet app, you can purchase items – in-store or online – at the tap of a button. Each week, you receive easy-to-understand updates regarding your spending behavior and your account balance. Your spending behavior is also color coded by category. Whether its food, shopping or entertainment, you receive a detailed breakdown of everywhere your money goes – something not always offered by traditional credit card issuers. Run into a problem? No problem! You can access 24/7 customer support by sending a simple text message.

Another great feature is the calculation of its cashback. Each purchase you make earns 2% cashback and purchases made directly with Apple, either at an Apple Store or the Apple App Store earns 3% cashback. But, unlike traditional cards that deposit your cashback monthly or quarterly, with Apple, you receive your cashback daily – meaning you can use it immediately for new purchases.

Competitors will Get Top Apple Offers

With so much competition in the credit card space, it’s only a matter of time before new players enter the market. And with Apple upping the ante regarding how credit cards should operate, better terms and greater rewards could be on the horizon.

Current credit card issuers – like Citibank, Chase Bank and Bank of America – won’t rest on their laurels either. Despite the enthusiasm for Apple’s new card, not everyone will qualify. And for those that don’t, the banks above will eagerly fill the void by creating similar cards of their own.

Many airline companies are already heading in this direction. To lure customers, they’re offering travel reward cards that include several thousand points when you sign up. And with competition just starting to heat up, those points could reach new heights in the near future.

Traditional Issuers will Purchase Fintech Firms

When large banks or other financial institutions lack the capacity to create products on their own, the best approach is to acquire companies that can. And as brick-and-mortar institutions continue to feel Fintech firms nipping at their bottom line, banks will need to acquire some of these competitors so they can use their technology to grow their own network.

To that point, as mobile payments and digital banking becomes increasingly popular – especially as millennials continue to make up a larger portion of the population – banks know that Apple is on to something with its expansion into finance. By having its own Fintech firm, traditional banks can leverage their large customer base by offering products and services that are currently in high demand. And because of their sheer size, traditional banks have plenty of room to maneuver and reinvent themselves.

However, it will take work. Apple just set the bar to a new high. Now it’s up to banks to up their game to avoid falling behind.

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