We have all underestimated the Apple Card

To recap the card’s main functionalities:

Indeed, the implications of the Apple Card does not stop here. It will change how you purchase at Apple, at other businesses and the relationship between Apple & other businesses earlier that you notice.

Indeed, this feature facilitates greatly the purchase of the iPhone, because the price tag is already so high. Evidently, this works with Apple Trade-In, which means that you get some cash by giving back your old device.

This launch is Apple’s test run of the monthly installment feature. It’s available for the iPhone for the moment because Apple wants to test the feature before rolling out on other products, secondly because the price tag of the iPhone has been the major reason for the slowing of its sales.

However, it would be a certainty that this feature would be available for other Apple products, notably the more expensive ones, like the Macbook Pro or even Mac Pro. In the future, we might also expect its roll out on non-Apple products, probably not on a zero-interest basis.

Intrinsically, what Apple Card promotes is a transition to a subscription-like purchase of physical objects, where you would:

For Apple, this would create a positive loop for both Apple Card and the sales of its other products, because it would be easier & cheaper to get Apple products if you have an Apple Card. If you already have Apple products, especially the iPhone, you have the incentive to get an Apple Card because you get cashback along with other benefits.

Currently, in the electronics industry, only Apple is doing Trade-In at a larger scale, in addition to several companies that buys back used electronics. Would the buyback work for other electronics companies? It would be hard, considering that a whole value chain of buyback & refunding has to be set up. However, a low-interest monthly installment scheme would be totally possible.

Then for a stretch, in which industry do we see selling of used objects and the ambition of subscription-based purchases? The car industry.

Apple has already been establishing relationships with car manufacturers with Car Play. Imagine Car Play extended to track the data on the use of the cars and especially using Apple Card to buy a car, pay monthly installments, and having the option to return the car after 5 or some years for cash.

In addition, as we’ll talk about later in this article, Apple Card will enhance Apple’s relationship with other businesses. Thus it’s totally imaginable that one day you would buy more Apple products or products of other companies with monthly installments, and some even with a Trade-In option, reducing one-time big payments to smaller ones, which will work just like a subscription.

From the beginning, Apple has made it very clear that they will not allow the data to be used for marketing & advertising, which is interesting & reasonable because now we have so many concerns with privacy and Machine Learning being used to better target the customers.

However, this does not mean that no data is registered using Apple Card. On the contrary, Apple knows very well where are you buying, how much, and in which store. This is already very useful.

At least, Apple Card will enhance once more the relationship between Apple and other businesses, starting with fidelity programs.

It has been quite some time since the introduction of “Wallet” on iOS. It has been very useful because

Now since the Apple Card knows which shop you’re buying from, it’ll be even easier to implement a fidelity program across e.g. cloth chain stores or restaurants, and even for online purchases.

In the future, more and more businesses are going to implement the fidelity program with the card in the Wallet, and the purchases will be linked with the fidelity program because they are all in your virtual Wallet.

But this is only the beginning of Apple getting more and more into the center of the e-commerce ecosystem.

As of today, Apple has 1–3% of cash-back for different types of purchases. Notably, brands like Nike, Uber, and Walgreens are in collaboration with Apple to provide a higher cash-back for purchases.

Combined with the fidelity program, more and more businesses are going to collaborate with Apple to provide cash-backs, all this without necessarily using data to do targeted marketing.

Another perfect example has already been demonstrated by Apple, with the 6% cash-back for the purchases in the 2019 Christmas season. I can’t wait to see news published at the beginning of 2020 on the sales of iPhone 11 in Dec. 2019.

In addition, geographical data is also available with Apple Card, which means customers can potentially get different cash-back in different stores of the same business, making it easier for businesses to attract customers to clear stock or fill low-traffic hours.

Apple Card is such an underestimated product that has a lot of implications on a larger scale, notably:

Thus, I’m indeed very excited to see the launch of Apple Card, its development in the following years, and how it will impact Apple & other businesses.

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