For the last ten days, I've been an Apple Card member. I've used it for just about every single brick and mortar purchase -- restaurants, gas stations, doctors appointments, concert and movie ticket bookings, and also Uber trips.
I realize that ultimately, we are talking about a credit card here. Any credit card can be added to Apple Pay within Apple Wallet, but the Apple Card user experience within Apple Wallet is unique to that product. And it is genuinely an excellent user experience which enhances one's sense of financial management with a credit card.
Dare I call it insanely great? I think so. It's now my default payment for virtually everything. And while I don't pull out the physical card as much as using Apple Pay on my Watch or my iPhone, some joy does come from using it and seeing the expression of curiosity in the person it's being handed to.
This novelty, I admit, is likely to wear off as more customers start using the physical card, but it makes for an interesting topic of discussion when someone else examines it. The Apple Card is an elegant object, a white credit card made out of titanium.
Have you been user experienced?
The user experience in Apple Wallet for Apple Card is just so much better than what my other four major credit cards offer, Chase Sapphire/Amazon Prime, Costco Citibank and USAA provide it's stunning.
Arguably what Chase offers in terms of a fully consolidated view of financial services, which in addition to the regular stuff like savings, checking, mortgages and loans is very good -- especially if we are talking about the full-blown desktop web site.
For credit cards, it has categorization on spending -- 15 separate ones to be exact, but it only does it on a billable period or year to date basis. Apple Card's user experience is better because it shows it to you on a day to day, at the moment of charge basis. It's easy to understand, and it's not cluttered.
I'd show you the page where it has charges from Popeye's Louisiana Kitchen and my electrophysiologist within hours of each other, but I'm kind of embarrassed by that.
The security aspects should not be understated, either. In addition to the end-to-end tokenization of Apple Pay which makes the Apple Card financial transactions highly secure (and also works with the physical card) the credit card number that Apple Card uses is virtual -- that means you can easily revoke it at any time, and it have instantly you issue a new one -- without having to replace your titanium card.
Ideally I would like to see the virtual card numbers be something you can issue on a vendor per vendor basis, such as for online merchants. But the fact I can have control over my card without waiting for a new one to be FedExed overnight is fantastic.
While anyone with a credit card can use Apple Pay, it would seem that Mastercard and Goldman Sachs have added additional "digital first" features specifically for Apple Card, much of which is behind the scenes and has to do with the payment infrastructure the banking partners have created.
The president of Mastercard North America, Craig Vosburg, recently explained on CNBC that this product is more secure because users get a one-time use number in the Wallet app. "The real key to the enhanced security here is happening behind the scenes where we're tokenizing the card credentials."
He added, "We're taking the digital representation of that 16-digit number and scrambling [it] into a code that only we and Goldman Sachs can recognize. We know where it's meant to be used. We know it's meant to be used with that Apple device and if it shows up somewhere else, we know it's been compromised and we can kill it."
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Cash is king but I want more
You also cannot downplay the direct cashback from purchases to Apple Cash -- which increasingly as Apple Pay is accepted a payment mechanism is going to be a substitute for legal tender itself. I see this also as a strong competitor to fly-by-night cryptocurrency outfits and also, services like PayPal/Venmo and Square's Cash App.
Right now, if you want to spend that Apple Cash directly, it has to be done via a merchant that accepts Apple Pay or with another person with an iOS device. Otherwise, you need to dump it into your bank account. For Apple to completely replace legal tender with Apple Cash, Apple needs to bring Apple Wallet and Apple Pay to Android.
Arguably, Apple Card's primary benefits today lie mostly in the user experience in Wallet and the cashback to Apple Cash in purchases, and the unique card security features that include transaction tokenization and automatic credit card number revocation and renewal.
For some people, this might be enough. But frankly, I want more. And there should be more. I remember when American Express had "Membership Has Its Privileges" as its marketing slogan back in the 1990s. Indeed, being an AMEX cardholder was definitely something that had significant perks, even for the base level green card holders. The company had field offices worldwide you could go to for concierge and financial services, for example. Today, you can still get more advanced perks with AMEX, but you have to be a Gold or Platinum cardholder to take advantage of them, such as airport lounge access.
Hey big spender
I was an AMEX cardmember for over 20 years, but I got rid of my last one about a year ago. I downgraded from a Platinum to a Gold, then to a Green. I then spent all my points and canceled it -- because finding merchants that were friendly to AMEX became increasingly difficult. And my various corporate jobs stopped using company-issued AMEX altogether, opting instead to direct reimburse personal cards instead.
I believe that Apple has an opportunity, with its loyal cadre of customers -- to create the same kind of brick and mortar benefits and perks that AMEX once had.
Unlike AMEX, or with other companies like Chase, I don't know if the company truly needs more than one version of the card, since it's mostly virtual and benefits could be upgraded on the fly.
I would expect that over time; it would work similarly to an airline loyalty program that with the more you spend, the higher your privileges. So the notion of "Silver," "Gold," "Platinum," or "Diamond" Apple Card might exist based on how you spend and which boxes you tick off in specific categories.
One of the things I miss from being a frequent traveler was having access to airport executive travel lounges. Back in the day, to take advantage of these, you needed a premium credit card associated with the airline that ran a lounge, such as Delta or American. Or you needed a premium AMEX card that was associated with the points and lounge networks these airlines were in. As I discovered, when those relationships deteriorated, you then had to switch credit cards (and deal with the points and mileage qualifications hassles).
Apple could forge the same kinds of lounge relationships for its highest spenders as AMEX has. Or it could do something different: Create and run its lounges.
Think of it: Serene, high-tech environments with decor designed by the same folks that built the retail stores, with the same friendly staff. Apple already disrupted the entire retail experience; think of the kind of things they could do with technology and customer service in America's airport terminals. They would make the network of AMEX's own Centurion lounges look like a joke -- and I am sure Apple could create more of them, for more people.
But why stop at airports? How about putting these lounges everywhere? I would like to see Apple disrupt the coffee shop as well. I'd love an Apple Lounge that I could use as a quiet, temporary contemplative space where I could have a hot or a cold beverage, a healthy snack, and access to a resident Genius or two.
I'd also like to see Apple disrupt Uber and other ridesharing services -- which I believe is already part of their overall plan. But do you know who I would really like them to wipe off this planet? Yelp.
Food for thought
Yelp is a useful service, but the reliability of its restaurant recommendations is questionable, given how Yelp's local sales and marketing teams muscle restaurants into buying advertising. Restaurants hate them because of their mismanaged and sophomoric "Elite Yelp" culture, while diners get exasperated at having to sift through dozens or hundreds of poorly written accounts to identify the few good nuggets of information about a restaurant.
An Apple-run food and entertainment listing and review service -- Apple Dine (remember Diner's Club?) would be a vast improvement over Yelp because they would bring the same rigorous methodology they use in running the App Store. But instead of developers, you'd have food service businesses, and instead of apps, you'd have restaurants.
In becoming a listed food service business, you'd have to conform to whatever rigorous standards for food and beverage that Apple would require. That may include going through training programs, implementing standard operating procedures, and whatever rigidity the company wishes to impose to be allowed on this system. That would consist of Apple Pay and Apple Card as required payment methods, with servers using iOS devices at the table to place orders and accept payments. Apple could corner point-of-sale (POS) in a restaurant setting for eateries that wanted to be part of this exclusive club.
Dining on data
Think of the technological benefits as well. Apple Watch could be used to report on restaurant audio volume levels in real-time to inform the diner about loudness level. Wi-Fi access points could be used to generate statistical data from client iOS and WatchOS devices for marketing and other purposes, benefiting both restaurant and diner.
The analytics spin on this for a restaurant would be massive. Apple could have more rigorous control over the way ratings, reviews, food photography (disrupt Instagram's food porn while we are at it) and feedback would be handled, and unlike Yelp, it could be a two way street for diner and restaurant.
Of course, Apple could do this for food delivery services as well, disrupting GrubHub, UberEats, and Doordash. The more retail and real-world experiences Apple is able to capture as part of its UX on iOS, iPadOS, and WatchOS, the more loyal their Apple Card customers will be.
I don't know if Apple is thinking about any of these things yet. But if they do, be prepared for some significant industry disruption in the premium credit card space.
Do you want Apple lounges, cafes, and restaurants? Talk Back and Let Me Know.