The Apple Card Is Here, With Cash Back and Privacy Promises
March 25 2019 - 3:48PM
Dow Jones News
By Liz Hoffman and Peter Rudegeair
Apple Inc. launched its highly anticipated credit card Monday,
positioning it as a more user-friendly and secure alternative in a
crowded market.
The new credit card, called the Apple Card and launched in
collaboration with Goldman Sachs Group Inc., will charge no fees,
pay daily cash rewards and sync with consumers' iPhones to analyze
their spending.
Apple Chief Executive Tim Cook announced the new card, which
will be released this summer, at an event detailing the launch of a
range of services, including news subscription and TV apps.
As reported earlier this year by The Wall Street Journal, the
card will run over Mastercard's credit-card network and give users
2% cash back when they pay using their iPhones. In-store swipes
will earn 1%, while purchases of Apple services and products will
earn 3%.
Budgeting features will show users how much they spend and where
and calculate how different repayment options will determine how
much interest they wind up paying.
Goldman aims to convert some of Apple's fans into customers of
its new consumer bank, Marcus. Speaking later at the event, Oprah
Winfrey hit on Apple's reach: "They're in a billion pockets."
Actors Aaron Paul and Octavia Spencer were shown cheering the
card's launch during a live stream of Apple's star-studded
presentation. Also in attendance in Cupertino, Calif., were
Goldman's CEO, David Solomon, and Chief Financial Officer, Stephen
Scherr, along with members of the team building Goldman's consumer
bank, Marcus.
The card's rewards are less generous than many already on the
market. Citigroup Inc. and Fidelity Investments both offer 2% cash
back, and U.S. Bancorp has a card that gives extra rewards for
Apple Pay transactions.
Rather, Apple is betting heavily on the loyalty of iPhone users
and the company's reputation for privacy and security. Breakdowns
of where and when users spend their money will live on the iPhone,
not Apple's servers, and Goldman has agreed not to sell or share
purchase data with advertisers, Apple said.
"Frankly, I'm underwhelmed," said Ted Rossman, an analyst at
CreditCards.com. "People will sign up for it, but that will be
mostly because they love Apple, not because this card is better
than anything that already exists."
Apple's payments chief, Jennifer Bailey, said she expects the
card to offer rates that are the lowest in the industry. The
average U.S. credit card carries an annual rate of nearly 18%,
according to CreditCards.com.
The new card builds on technology pioneered by a startup that
Goldman acquired in 2017 that generates one-time, virtual card
numbers for each transaction. The number also doesn't appear on the
physical card, which design-obsessed Apple said is made of titanium
and is laser-etched.
"As a newcomer to consumer financial services, Goldman was up to
the challenge of doing something bold and innovative," said Ms.
Bailey.
(END) Dow Jones Newswires
March 25, 2019 15:33 ET (19:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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