Everyone has someone like this in their life, the person who absolutely has to have the latest technology regardless of its value to their lives or wallet. For me, that is my best friend Kel. She wears her Apple products like body armor to protect her against unforeseen internet contingencies. I also like to think she flaunts her Apple arsenal to impress. Kel has several iPads, numerous iPods, and Macbooks, an iWatch and now, for folks like Kel, Apple is offering the ‘Apple Card’. It is a shrewd move on Apple’s part since its brand loyalists are legion. But is it a good idea for the rest of us? Let’s examine what this offering includes and you can gauge for yourself if the card delivers on its promises, or, like so many products in the marketplace including some Apple releases (Apple III, Newton, Lisa, Macintosh TV, and AirPower come to mind), is just hype.
We are all utterly dependent on the internet. If you do not think so, try to remember the last time you were impacted by a natural disaster. Hereabouts, that was Hurricane Sandy back in Fall 2012. This writer’s domicile was without power for two weeks. Imagine two weeks without internet access for banking and paying bills, finding information fast, communication, remote working, gaming, NetFlix, and so much more! Our lives are on the internet (and Cloud). Other than a power outage what is the internet’s Kryptonite? Hackers. So this long-winded preamble sets the stage for Apple Card, touted as the most secure credit card in history. And, since its launch, the biggest target for hackers on the internet ever. Here are its pros and cons:
Before we delve into the specifics of Apple’s revolutionary (well sorta) transaction process it is important to note that the card itself is a work of art. Conventional size, but not conventional in appearance, Apple card bears the incised brand logo, the cardholder’s name, and the smart chip. It is spare, simple, and secure, much as Apple’s process.
The primary reason for Apple’s bravado regarding the security of its credit card is this: Apple owns the entire transaction process so in their minds, there are no weak links to invite fraud. With Apple Card, commonplace credit card encryption is passe. Biometrics, now common with their other products, confirm that the Apple cardholder is indeed making a purchase. Your fingerprint, face, or wrist + passcode are required in order to perform a transaction. This of course means that Apple Card owners must also have one or several other Apple products. At this point in our story, Apple’s modus should be transparent.
Vendor Does Not Read Apple Card
But back to performing that transaction. For additional security, when your Apple Card is held over a retailer’s card reader, a one-use token is passed to it instead of the device reading your card’s entire 16-digit number. In other words, your credit card number is never captured by the vendor who could be far more vulnerable to hackers than your individual account.
In the event a conventional credit card is lost or stolen, one has to call the bank or issuer, recite the card’s 16-digit proprietary number as well as the CVV number on the back of the card. And wait. Then listen to a recital of all recent transactions and exclude valid purchases from those one did not make. Or, one is completely unaware that their account has been accessed and learns from an automated voicemail that questions recent transactions from across the globe.
Another inconvenience for conventional cardholders is when they are unaware that their account has been breached until they attempt to make a purchase and find their card has been blocked. If shopping online, no problem, when shopping in a retail store, embarrassing!
With Apple Card (and frankly with many other card issuers) every transaction triggers an email so that you’ll notice if you receive word that you just bought dinner in Tokyo yet you reside in Duluth. The disparity in location will prompt an ‘Unusual Activity Detected’ alert notification along with useful information including the amount of the purchase, the date, exact location in text and on a map. Cardholders are prompted to tap either ‘Transaction is OK’ or another option to report a potential problem or dismiss the action. What happens next is where Apple distinguishes itself: if there is an issue, from that point Apple takes complete charge on to resolve or remediate. To recap, two taps is all it takes for an account holder to verify a purchase or to instigate an investigation by Apple.
Additional pluses include ease of access by the account holder. Instead of going to your card issuer’s website, then using logins to access your account to view your dashboard, Apple’s status summary is easily accessible from your iPhone using biometrics. Superb design is an Apple hallmark. Accordingly, the graphics and layout are meant to be read from any device. This means each summary page is succinctly laid out by color-coded category. Even for mobile device users, the state of your account can be understood at a glance.
What still needs to be ironed out? Okay, ordering food delivery for one. If the vendor does not accept Apple Pay you are essentially SOL. That’s because there are no numbers printed on Apple card, they are encrypted. And while we are on the subject, the incentive for brand loyalists is 3% cash back on purchases of Apple products, and 2% for items bought using Apple Pay. That is not very competitive and will not likely lure consumers away from banks they have been doing business with for years. So promotions are tepid and with their credit card, Apple is marketing to its minions (I know without asking that there is a slot in Kel’s wallet reserved for Apple card), not the greater percentage of individuals in this market share. A lost opportunity?
While the goal for Apple Card is to reduce the expenses and interest for its cardholders, offering a credit card may just be another way to have its Apple Pay product more widely accepted. And since Apple is renowned for making improvements to just about every existing technology, there’s the surety that Apple holds patents on their innovations and that the financial transaction herd will soon follow.
It is easy to predict that Apple card is the future of credit cards, at least to the point where electronic transactions will be made more secure which will also facilitate the sales funnel. The win-win here is for consumers who just offer their iPhone to be scanned at the drive-through as well as for Apple’s profit margins. Increased security and ease of use for cardholders and untold ROI for Apple. Not hard to see who is the bigger winner now is it?