Apple has announced a fintech service which will enable customers to turn their mobile phone into a credit card.
From the summer customers in the US will have access to the Apple Card.
There is an actual card and data is transmitted to an app on the iPhone. Beyond its great usability and high security standards the mobile phone giant is also offering financial incentives, with Apple Card.
This is what fintechs need to do if they are to take on traditional credit card firms and banks. As a consumer of financial services it takes a financial advantage for me to change service provider. The technology is all well and good but the traditional players are now doing the tech part of fintech pretty well. The fintechs need to offer something different around the fin part of fintech.
According to Apple the card will also reward customers with cash back on spending and will get rid of card fees and offer low interest rates.
Of course it will bring with it Apple style functionality. Apple said the Apple Card application process will take minutes fees and will introduce new levels security and privacy.
iPhone users will be able to sign up and it will be linked to their Apple Pay account.
“Apple Card builds on the tremendous success of Apple Pay and delivers new experiences only possible with the power of iPhone,” said Jennifer Bailey, vice president of Apple Pay. “Apple Card is designed to help customers lead a healthier financial life, which starts with a better understanding of their spending so they can make smarter choices with their money, transparency to help them understand how much it will cost if they want to pay over-time and ways to help them pay down their balance.”
Fintechs everywhere are trying to bring Apple-like usability to their financial services, while Apple itself is applying its expertise in providing consumer friendly services to the credit card sector.
It will use machine learning and Apple Maps to clearly label transactions with merchant names and locations.
But there is always a traditional player involved when it comes to financial services. In this case Apple is working with Goldman Sachs and Mastercard to provide the support of an issuing bank and global payments network.
Goldman Sachs doesn’t normally do consumer financial services but will be the source of money while Mastercard will provide cardholders the ability to shop at around the world, through its network.
“Simplicity, transparency and privacy are at the core of our consumer product development philosophy,” said David Solomon, CEO of Goldman Sachs. “We’re thrilled to partner with Apple on Apple Card, which helps customers take control of their financial lives.
Mastercard also said it was very happy. And why not? Any traditional player will be pleased to be associated with Apple. This will give these traditional finance firms access to a huge potential customer base.