Apple is at it again. The company is throwing the tech community another curveball, this time by announcing Apple Card – its “new kind of credit card” designed specifically for the iPhone. Built into the Apple Wallet, it offers no fees, lower interest, and a new level of privacy and security. A likely attractive option for the brand’s loyalists.
This is the beginning of the end for traditional credit card networks. It’s also a sign of the sheer utility and dominance of the iPhone.
As a consumer device, there is almost nothing the iPhone can’t do. Think of it: Most consumers can survive in many cities with only their phone. From talk and text to maps to Apple Pay. With the latter, you can make purchases in all kinds of apps or on the web, it’s synced to major transit systems, and is accepted at 74 of the top 100 U.S. merchants.
Benefits to Consumers and Brands
While the Apple Card announcement will not shake up retail in the short-term, it will accelerate NewStore’s vision of an industry run purely on iPhones. Similar to how the taxi industry has been converted to an app industry by Uber, the retail industry is being converted to an app industry by Apple. And when we say retail, we mean end-to-end retail – from inventory and fulfillment to customer service and payments.
We see Apple Card bolstering the increasingly popular Apple Pay. Consumers will become even more accustomed to using this form of payment in-store, which will force brands to embrace it. It’s a win-win. Brands will be able to offer customers the fast and easy service they expect. Additionally, by eliminating the physical act of payment, they will keep consumers close to the brand and product. This puts the emphasis back on the experience, instead of it stopping at checkout.
From the retailer perspective, Apple Pay and now Apple Card represent an opportunity for more sales. By offering mobile payments, you unleash your store associates from the cash wrap and enable them to become a POS in all corners of the store. They will build more meaningful relationships with customers, which invites the opportunity to cross-sell and upsell. Plus, shoppers will never again not be able to buy because they left their wallet at home.
Prediction for the Future
In short, Apple Card will wipe out the Visas and the Mastercards of the world because, like many before them, Apple beat them to it. The major credit card networks had their chance to introduce a simple payment mechanism without logins and passwords. When businesses began to digitize, and brands started going customer-first, they should have jumped at the opportunity to make cashless effortless.
What Apple has done with Apple Card affirms that retail belongs on a smartphone. In the next two to three years, consumers won’t look to shop everywhere credit cards are accepted. They’ll look to shop everywhere Apple Pay is accepted.
Stephan Schambach is Founder and CEO of NewStore. Under his leadership and vision, he brought Intershop and Demandware to IPOs with multi-billion dollar market caps. In 2016, Demandware was acquired by Salesforce and is now known as Salesforce Commerce Cloud. He has won numerous awards around the world for his technology and entrepreneurial leadership, and he is the author of Makeover: How Mobile Flipped the Shopping Cart.