Apple Card

Apple Card

Example of physical Apple Card
Location	United States
Launched	August 20, 2019; 5 years ago (2019-08-20)
Technology	Credit card Contactless payment Apple Pay
Operator	Apple Inc. (developer) Goldman Sachs (issuing bank) Mastercard (payment network)
Website	applecard.com

Apple Card is a credit card created by Apple Inc. and issued by Goldman Sachs, designed primarily to be used with Apple Pay on an Apple device such as an iPhone, iPad, Apple Watch, or Mac.^[1][2] Apple Card is available only in the United States, with 12 million cardholders as of early 2024.^[3][4][5]

History

On August 6, 2019, invitations to an early preview started being sent to randomly selected users who had previously signed up for email notifications ahead of Apple Card's official launch.^[6] It was released in the United States on August 20, 2019.^[7] Additional cardholders and joint accounts were not supported at its launch.^[8]

The card features a number of consumer-friendly features including no fees, software that encourages users to avoid debt or pay it down quickly, the industry’s lowest interest rate range for comparable cards, and a mandate to approve as many iPhone users as possible. These features are seen as being risky for a bank to take on, and led other banks with established consumer credit card operations including Apple's long time partner Barclays, along with Citigroup, JPMorgan Chase and Synchrony, to turn down Apple's proposal.^[9][10] Goldman Sachs defended the terms of the deal saying they were "thrilled" with the partnership and seeking "to disrupt consumer finance by putting the customer first."^[9]

Apple Card was announced at an Apple Special Event on March 25, 2019. Unlike previous special events which have historically served as platforms to announce upcoming hardware, this event focused on new internet software and services. Other services announced at the event include Apple TV+, Apple News+, and Apple Arcade.^[11][12]

On April 20, 2021, Apple announced that it would be introducing joint accounts and additional cardholders. These features have been introduced under the brand Apple Card Family. Individuals 18 years and older can be co-owners of the account, while individuals 13 years and older can be additional cardholders. Up to five individuals may be additional cardholders or co-owners.^[13]

In January 2023, Bloomberg reported that Goldman Sachs suffered $1 billion in losses because of the card.^[14]

On April 17, 2023, Apple began offering a high-yield savings account backed by Goldman Sachs to Apple Card users.^[15] The Wall Street Journal reported in June 2023 that Goldman Sachs had entered into discussions with American Express to explore the possibility that American Express might take over the partnership, replacing Goldman.^[16]

Enrollment

Back side of the physical Apple Card showing the Goldman Sachs and Mastercard logos

Instant issuance

Users can apply for an Apple Card directly from within the Wallet app.^[17][18] Upon approval, a digital Apple Card is made available immediately on all of the user's devices. Users also can order a physical card for use at locations that do not accept contactless payments.^[19]

The physical card does not display numbers on the front; instead, users receive a 16-digit virtual card number for websites and apps that do not accept Apple Pay.^[20] Apple Card details are accessible in the user's iCloud Keychain and can be auto-filled into online forms.^[21]

Titanium card

Apple has designed a titanium Apple Card for shopping at locations where Apple Pay contactless payment is not accepted.^[22] The logos on the card are engraved, and the cardholder's name is laser-etched onto the card.^[23][24] The card has no card number, CVV security code, expiration date, or signature printed on the card.^[22]

On delivery, users with the iPhone XS and above can activate the physical card by moving their phone near a NFC tag concealed within the card's packaging.^[25] Users with an iPhone X or earlier need to open the Wallet app before tapping the phone against the card.^[26]

Features

Cashback

Regular purchases made using the physical card earn 1%, purchases made with Apple Pay earn 2%, and purchases at Apple Stores and selected partners earn 3%. Cashback on eligible purchases is deposited into the customer's Apple Cash account, or deposited in the customer’s Apple Card Savings Account, or applied as a statement credit.^[27][28][29]

Fees

Apple Card does not charge late, foreign transaction, returned payment, or annual credit card fees, but it does generate interest fees when carrying a balance and interchange fees charged to the vendor.^[30][18]

Apple Card Savings

Launched on April 17, 2023, it allows Apple Card owners and co-owners to open a 4.15% savings account to deposit their Daily Cash,^[31] with no fees and no minimum balance.^[32]

Card management

The Wallet app collates Apple Card transactions by category and provides weekly and monthly activity summaries.^[22] Apple Maps is used to provide a colour-coded category, map location, and contact details for the merchant (where available).^[33]

Apple added support for users to give third-party budgeting apps access to transaction data for budget management in iOS 17.4^[34]

Privacy and security

Main article: Apple Pay

A unique card number is created for each device and is stored in a secure element which is used by Apple Pay to handle transactions and on-device cryptographic functions. Each transaction uses its own one-time dynamic security code and is authorized with Face ID, Touch ID,^[35] or passcode.^[36]

As with Apple Cash, transaction history for Apple Card is stored on and synced across devices using iCloud and encrypted such that only the authorized account holder can view it.^[37] Two-factor authentication must be enabled on the user's Apple ID account in order to apply for Apple Card.^[8][38]

Partnerships

For Apple Card's initial US launch, Goldman Sachs assumed the role of the issuing bank,^{[39][2][38][40][41]} while Mastercard served as the payment network.^[42]

Reception

In March 2020, about 3.1 million Americans held the Apple Card. That number grew to 6.7 million cardholders as of early 2022 and to 12 million by early 2024.^[4] Six in ten Apple Card users use it as their primary credit card.^[43]

On October 1, 2019, MarketWatch published an article stating that Goldman Sachs is not reporting payments to the credit reporting agencies.^[44] The article suggests that Apple and Goldman Sachs rushed development of the card, and that the companies would fix the issue over time.

On November 7, 2019, David Heinemeier Hansson posted on Twitter that he was given 20 times the credit limit than was offered to his wife despite her having a better credit score. He accused Goldman Sachs of gender discrimination by using algorithms to determine a person's credit limit.^[45] Apple's co-founder Steve Wozniak also tweeted that he received ten times the credit limit that his wife was offered.^[46] In response to Hansson's tweets, the New York State Department of Financial Services launched an investigation into Goldman Sachs's practices.^[45]

On March 23, 2021, the New York State Department of Financial Services issued a report summarizing its findings after investigating consumer complaints about the Apple Card. The investigation, which included a review of several thousand pages of records and written responses from Goldman Sachs Bank and Apple, interviews of witnesses and Apple Card applicants, and analysis of underwriting data for approximately 400,000 New York State applicants for the Apple Card, did not produce evidence of unlawful discrimination against applicants under fair lending law.^[47]

References

1. "Apple Pay is compatible with these devices". Apple. August 12, 2019. Retrieved August 22, 2019.
2. "How to use Apple Card". Apple. August 20, 2019. Retrieved August 22, 2019.
3. "How to apply for Apple Card".
4. Shevlin, Ron (April 10, 2022). "'Breakout': Apple's Plan To Pump Up Apple Card And Apple Pay And Win The Payments War". Forbes.
5. https://www.apple.com/newsroom/2024/01/apple-card-is-helping-cardholders-live-healthier-financial-lives/
6. Patel, Nilay (August 6, 2019). "The Apple Card starts rolling out today". The Verge. Retrieved August 20, 2019.
7. "Apple Card launches today for all US customers". Apple Newsroom (Press release). Retrieved August 20, 2019.
8. Panzarino, Matthew (March 28, 2019). "How Apple Card works". TechCrunch. Retrieved April 8, 2019.
9. Son, Hugh (May 28, 2019). "A Goldman Sachs rival pulled out of the Apple Card deal on fears it will be a money loser". CNBC. Retrieved July 2, 2022.
10. Son, Hugh (August 14, 2019). "Goldman Sachs may lose money on the Apple Card in the next recession, Nomura says". CNBC. Retrieved July 2, 2022.
11. Arkin, Daniel (March 25, 2019). "Apple event: TV, news and video game services signal new direction for iPhone maker". NBC News. Retrieved March 26, 2019.
12. Kleinman, Zoe (March 25, 2019). "Apple debuts own credit card and TV shows". BBC News Online. Retrieved March 25, 2019.
13. "Apple introduces Apple Card Family, enabling people to share Apple Card and build credit together". Apple Newsroom (Press release). Retrieved April 24, 2021.
14. Marcelline, Marco (January 14, 2023). "Apple Card Has Cost Goldman Sachs Over $1 Billion in Losses". PCMag. Retrieved January 16, 2023.
15. "Apple Card's new high-yield Savings account is now available, offering a 4.15 percent APY". Apple Newsroom (Press release). Apple Inc. Retrieved April 17, 2023.
16. Andriotis, AnnaMaria (June 30, 2023). "Goldman Is Looking for a Way Out of Its Partnership With Apple". Wall Street Journal. Retrieved July 1, 2023.
17. "How to apply for Apple Card". Apple. May 30, 2023.
18. Son, Hugh (March 25, 2019). "Apple unveils new credit-card: the Apple Card". CNBC. Retrieved March 25, 2019.
19. Leskin, Paige. "Here's when the new titanium Apple Card will be available, and how you can sign up". Business Insider. Retrieved April 7, 2020.
20. Haselton, Todd (August 15, 2019). "The Apple Card has no numbers on it — here's how to find them to buy stuff online". CNBC. Retrieved April 7, 2020.
21. Delfino, Devon. "How to set up autofill on a Mac computer in Safari, so you don't have to type in your information each time". Business Insider. Retrieved April 7, 2020.
22. "Introducing Apple Card, a new kind of credit card created by Apple". Apple Newsroom (Press release). March 25, 2019. Archived from the original on March 25, 2019. Retrieved March 26, 2019.
23. "Apple introduces its own credit card, the Apple Card". Retrieved January 28, 2020.
24. "About the titanium Apple Card". Apple. October 18, 2019. Retrieved January 28, 2020.
25. Rambo, Guilherme (March 27, 2019). "Here's how the physical Apple Card will be activated on iOS [U]". 9to5Mac. Retrieved July 18, 2019.
26. "Request and use your titanium Apple Card". Apple. Retrieved August 20, 2019.
27. "Daily Cash with Apple Card". Apple. June 6, 2023.
28. White, Alexandria (August 15, 2019). "Here's how the Apple Card's 'Daily Cash' works". CNBC. Retrieved April 7, 2020.
29. McCann, John (March 25, 2019). "Apple Card launches as a new type of credit card on your iPhone". TechRadar. Retrieved March 27, 2019.
30. "Apple Card Review: Actually Owning It Changed Our Minds". Wirecutter. December 11, 2019. Archived from the original on December 13, 2019.
31. Sahadi, Jeanne (April 17, 2023). "Apple offers 4.15% high-yield savings to its Apple Card holders". CNN.
32. Dillet, Romain (April 18, 2023). "Apple launches Apple Card's savings accounts with 4.15% interest rate". TechCrunch.
33. "Apple Card - How It Works". Apple. Retrieved July 18, 2019.
34. Clover, Juli (March 5, 2024). "iOS 17.4 Lets Budget Apps Read Real-Time Apple Card Transaction Info". MacRumors. Retrieved March 5, 2024.
35. Matsakis, Louise (March 25, 2019). "Apple Enters the Credit Card Market With—Yep—Apple Card". Wired. Retrieved March 26, 2019.
36. "Apple Pay security and privacy overview". Apple. July 12, 2019. Retrieved August 21, 2019.
37. Detrixhe, John (March 25, 2019). "The most original thing about Apple's credit card isn't its app, fees, or laser-etched titanium". Quartz. Retrieved March 26, 2019.
38. "How your Apple Card application is evaluated". Apple. August 20, 2019. Retrieved August 22, 2019.
39. "Report: Goldman Sachs spending $350 to acquire each new Apple Card user, could see losses in a recession". 9to5Mac. August 14, 2019. Retrieved August 22, 2019.
40. "Apple and Goldman Sachs launch their credit card". The Economist. Retrieved August 22, 2019.
41. Statt, Nick (August 21, 2019). "Apple warns you may permanently discolor your Apple Card if it's stored in leather". The Verge. Retrieved August 22, 2019.
42. Griffin, Andrew (March 25, 2019). "Apple just released a stunning new credit card". The Independent. Archived from the original on May 8, 2022. Retrieved March 25, 2019.
43. Shevlin, Ron (March 9, 2020). "If Tim Cook Won't Tell The World How The Apple Card Is Doing, I Will". Forbes. Retrieved March 12, 2020.
44. Passy, Jacob. "Apple and Goldman Sachs don't report Apple Card information to credit bureaus". MarketWatch. Retrieved January 24, 2020.
45. Raina, Mekhla; Dilts, Elizabeth (November 9, 2019). "Goldman faces probe after entrepreneur slams Apple Card algorithm in tweets". Reuters. Retrieved November 10, 2019.
46. Meek, Andy (November 10, 2019). "Steve Wozniak joins critics who think Apple Card algorithm might have a major flaw – gender bias". BGR. Retrieved November 10, 2019.
47. "Report on Apple Card Investigation" (PDF). New York State Department of Financial Services. March 23, 2021. Archived (PDF) from the original on March 23, 2021. Retrieved April 11, 2021.

External links

• Official website