(NASDAQ: AAPL) previously introduced an extension of its already successful Apple Pay program with the introduction of a credit card called Apple Card. Apple detailed a number of features designed to make the card stand out from its peers, including a simple application, no fees, a lower interest rate, a clear and compelling reward program, and of course, a focus on privacy and security of transactions.
Unlike most cards, the Apple card does not have card numbers, CVV security code, expiration date or signature on the card, "makes it safer than any other physical credit card," Apple said. Users will be able to find the aforementioned information in the digital copy of the card in the Wallet app.
Although it may seem like a trivial addition, the Apple card can make an already successful foray into digital payments even better.
Removing customer smear points
Apple will use machine learning and Apple Maps to replace the encrypted merchant names displayed on many credit card details with names and locations that users will actually recognize. The app also provides weekly and monthly summaries arranged by categories.
The rewards program was another area that Apple tried to improve. Whenever users pay with Apple Pay using their iPhone or Apple Watch, they receive 2% cash back and it increases to 3% for direct purchases from Apple – included with Apple stores, App Store or Apple services. . All other purchases will receive 1% cash back and the total amount of cash is unlimited.
The daily cash feature allows rewards to be collected on a daily basis, and these cash rewards are stored in an Apple Cash card in the Wallet app and can be used the same day. This allows the accrued benefits to be used for purchases, used to pay off the card balance or sent to friends using the messaging app.
Apple has also added tools that help users better understand the cost of not paying the balance in full. Customers can use the app to determine how a particular monthly payment will affect the balance and total amount paid.
The company cooperated with Goldman Sachs and Mastercard who will act as issuer bank and global payment service provider respectively. Apple said Goldman would never sell or share data with third parties for marketing or advertising.
Apple Card users will benefit from some advanced security features. The company created a unique architecture – Secure Element – consisting of a special security chip used by Apple Pay, which contains the card's information. Each time a payment is made, it creates a one-time use dynamic security code that protects the card from unauthorized use. Apple also said it would not track where the user acted, what they bought, or how much they paid. This information is all contained locally on the iPhone.
Extension from an already growing base
Apple Pay already has a reasonable level of success, and the Apple card will only expand on it. During the conference call to discuss Apple's performance last year, CEO Tim Cook said the digital payment method reached more than 1.8 billion transactions during the holiday season – twice the volume achieved in the same period the year before. That number is sure to soar, as Apple Pay is now used on 27 markets around the world and will be available in more than 40 countries by the end of 2019. It is also about to process over 10 billion transactions this year.  An iPhone showing features from the Apple card, including total balance, weekly activity, and when payment is due. "src =" https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F517639%2Fapple-card_iphonexs-total-balance_032519.jpg&w=700&op=resize "/>
Retail with Apple Pay now exceeds 70% of US sales, and penetration is even higher in many other countries. Apple Pay is accepted by 80% of salesmen in Canada, 85% in the UK and 99% in Australia. The number of new countries this year alone will make use of Apple Pay.
This gives Apple a solid foundation for launching the Apple card. The company will earn interest on balances, as well as exchange or swipe "Sales Fees. In addition, Apple's credit card costs are likely to be less than similar retailers.
The use of the map feature and recognizable trade names – along with the ability to write questions directly to Apple – will cut down on customer service interactions , which helps to keep costs down, eventually Ap ple do not have the typical marketing expenses to attract customers for the offer, as the company has nearly 1 billion iPhone users as an existing market for the card.
The Apple card does not have to be a game changer to be a great success for the iPhone manufacturer. It's good for a good start.