The New Apple Card Looks Pretty Clever

Apple’s Monday event was dominated by Hollywood stars who were drawn to Cupertino by the company’s good taste and aggressive push into an array of new content services, games, subscriptions, and original programming. As such, the Apple Card’s unveiling was a bit lost in the grand Oprahness of it all.

But the company’s new card, which will be backed by Goldman and run on the Mastercard network, could be the real deal, notwithstanding what the skeptics say and antitrust alarm bells that could follow. For consumers, the card will offer decent if not shock-and-awe benefits, daily cash back and a single-use security code each time a purchase is made. The latter attribute, along with the company’s vow not to “collect” customer purchase activity or sneak in lots of fine-print fees, will appeal to those concerned with security, privacy, and transparency.

But the real sizzle is that it’s purpose-built for the iPhone (although a sleek, numberless titanium card will be provided to holders too). "The Apple card is supposed to drive adoption of Apple Pay," noted Kalpesh Kapadia, CEO and co-founder of analytics-based credit fintech Deserve. "This is a crowded space with preferences and loyalty already set for super prime customers, so it seems this was created mostly for Apple fans."

As a result, in the words of payments entrepreneur Brian Roemmele, Apple has in essence created a “new economy” by funneling daily cash rewards directly back to the Wallet app. When that cash is subsequently used on Apple products or with an Apple partner, fees that normally get paid out to intermediaries won’t be present. This will undoubtedly accrue to Apple’s bottom line in time. In turn, Apple will have newfound money that it can use to offer perks and other incentives — all of which will be covered by other people’s (or should we say, other merchants’) money.