Apple’s recent Apple Card announcement did not set the credit card and payment worlds on fire. Further, we will have to wait until this summer to see the new card in action. Merchants will now have another payment method to offer, assuming they are EMV terminal enabled. As many have pointed out, the cash back rewards are not eye-popping. Perhaps the best reward feature could be the 3% cash back at the Apple Store. Apple users are known as early adopters, and retailers will be looking for anything that will drive more sales.
A Twice article has the story on merchant considerations which is excerpted below.
Initial reaction to Apple’s entrance into the credit card space via its Apple Card was met by the expected healthy skepticism. After all, Apple may know tech, but what does the company know about consumer credit?
Many observers also looked askance at Apple Cards reward benefits, pointing to other similar or even more lucrative money-back programs from other more well-established card issuers.
But as those in the tech business have learned, discounting Apple’s ability to create consumer must-have craving into any market it enters — music selling, smartphones, tablets, wearables — often makes initial cynics look foolish.
Apple Card’s appeal is three-fold:
- First, there’s its supposed simplicity: No more mystery vendors, GPS-recorded purchase locations, spending color-coded by category and flexible payment plans.
- Second, there are the cash rewards: 1 percent back on plain credit card purchases, 2 percent back on purchases made with Apple Pay, 3 percent back on Apple store purchases in-store or online, all applied daily, plus no fee.
- Finally, there’s the plain cool factor, especially that titanium credit card for that increasingly rare retailer that doesn’t accept mobile payments.
Overview by Raymond Pucci, Director, Merchant Service at Mercator Advisory Group