Apple Card has arrived

The biggest financial product launch of 2019 is here, with the official announcement of Apple Card going live for US consumers on August 20. 

Initial reaction was mixed

After rumors leaked in February regarding an Apple/Goldman Sachs credit card, the product was officially unveiled one month later. Business sites, such as CNBC, and tech sites, such as The Verge, offered opinions on the deal. Overall, feelings were mixed on the card’s meager cashback rate and lack of a welcome bonus.

Apple focuses on services

The company’s focus on driving growth within its Services division meant that the company needs Apple Card, and its sibling app Apple Pay, to scale quickly. The main way to earn rewards is by using Apple Pay which gives a healthy 2% cashback reward. This encourages consumers and lets Apple rack up merchant service fees.

A graduated rollout

Reflecting how Goldman Sachs is building the finance and customer support side from the ground up, the initial rollout of the card has been slow and steady. Apple employees were able to first start testing the card in June, and certain members of the public were able to apply in early August.

What we think

Apple’s focus on driving revenue in the Services division is a direct result of slowing iPhone growth. The company needs Services to take off and adding an additional avenue from the Apple Card to Apple Pay helps. After all, Apple receives a small payment for each Apple Pay swipe. However, the major question is whether or not people will find the card enticing enough to use. An average cashback rate could be buoyed by the colorful in-app design and category spend tracking.

The Apple Card heavily relies on Apple Wallet—Apple’s central hub for a user’s credit and debit cards. However, similar to major banks banding together to create Zelle after feeling the pressure from Venmo, what’s to stop the banks from making their own Apple Wallet-like app that can house all of a user’s cards?

Regardless of the Apple Card’s success, the real winner is Goldman Sachs. It can be assumed a Marcus credit card is top of mind for the company—especially since the company invested so much time and money in building the support capabilities for the card. In fact, at the time of the Apple Card announcement, bank president David Solomon told employees that the partnership was “a major step in the growth of our consumer franchise,” a rally cry and perhaps word of warning all the same.