Thread by @peter

Seeing so many bad/misinformed hot takes about Apple Card, I might as well lend my payments perspective.

Trigger warning ahead for Apple True Believers. 😂

a thread... 🍎 💳

First off, to appease the fanboys, this is a pretty good offering from Apple. Some genuinely novel features, wrapped in the typical Apple sexiness/walled garden.

But... it’s far from revolutionary.

Rewards - 2% cash back is good (not great), and only comes when you use Apple Pay. Clearly designed to drive usage/customer demand for NFC.

3% back on Apple purchases is nice, but it’s far from best in class.

Everything else gets you 1% cash back, which is meh.

Unless you spend more on Apple products than gas, groceries and restaurants combined, there are many better rewards cards for you.

See @NerdWallet and thank me later.

Pushing cash rewards to Apple Cash card w/in Apple wallet is a clever move to spur peer-to-peer payments (think Venmo-killer) & keep $$$ inside Apple ecosystem.

Apple’s cost of funds is near zero if Apple Cash gets recycled to iTunes or P2P (vs card fees today).

Apple pushing people to keep cash inside the Apple ecosystem is not to be underestimated!

They are playing a long game here. If successful, this is very bad for the card networks.

.@mint and other PFM (personal financial mgmt) apps are having a bad day today with the promise of auto-classification of Apple Card transactions.

Showing merchant locations on a map in transaction history is a nice touch, but @Square did it first.

Apple claims NO FEES! None!

Except their own presentation shows foreign transaction fees on a statement. 🤔

Speaking of fees, they claim low interest rates, but fine print shows “13.24% to 24.24% based on creditworthiness”, which is a big range & also standard for credit cards. Plus, you do pay more for missed payments (again, typical industry terms).

A note on usability: Apple touts no card number on the physical card! No CVV! Security! Privacy! Yay!

Ok... but what happens when I want to pay somewhere w/o Apple Pay or Safari? Do I have to open Apple Wallet and key enter everything? Sounds like a PITA.

That said, text-based customer assistance is pretty nice, so there’s that.

Big winners in the traditional payments world here are Goldman Sachs (new entrant in consumer cards!) and MasterCard.

I have no special insight into how MC beat out Visa, but I have a hunch they were willing to do stuff V wouldn’t (new rules or backing up the 💰 truck :-).

All in all, Apple Card is a cool development in the payments world, and the impact on Apple Cash will be especially interesting to watch (P2P payments & Apple Pay activation).

One thing to add: the death of $V and $MA is typically grossly exaggerated, but Apple Card could become a big threat if Apple Cash gains traction & keeps funds w/in ecosystem and/or acts as a bridge to banking directly w/ Goldman, cutting networks out of txns when possible.

Correction on the foreign fee thing - I mixed up a screenshot of a typical non-Apple Card. Appears they do not have foreign txn fees. My comments on interest rates stand, tho.