When Apple announced its upcoming credit card in cooperation with Goldman Sachs, there was no fee on the Apple Card. In addition, Apple offers a 1% refund for physical card transactions to 3% for Apple product purchases. This has led someone to wonder how the company will make money on the Apple card.
Of course, the card charges the interest on balances that are not paid in full each month, but that is not the only source of income, say that payment expert experts …
Business Insider spoke with a number of those who said that while Apple is talking about low interest rates, it has not been unusual.  The fine print at the bottom of the Apple Card announcement shows that it will charge a variable interest rate between 13.24% and 24.24% – a wide but not uncommon selection.
Although Apple succeeds in charging lower prices than the rest of the industry, the card can still draw significant amounts of interest income.
"The credit card interest rate is very high, so there is room to make money yourself at lower prices," said Jim Miller, VP of Banking and Credit Cards at JD Power, Business Insider said.
The top end rate also suggests that Apple targets against those who have low credit quality, who is most likely to have a balance on the card.
Apple cannot charge consumers, but – like any other card vendor – it will charge them to sellers. about 2% to card companies to process payments in so-called exchange or swipe fees.
However, there is downward pressure on these, and Apple will probably only break itself due to 2% return it offers at Apple Pay
Four Key Savings
Experts say Apple also wants to keep more of interest paid by customers, thanks to four key savings.
First, short-term Are usually substantial amounts of money on customer acquisition. Banks need to pay marketing and advertising costs, and they typically also have to offer introductory bonuses to attract new customers – whether it's 0% interest on balance transfers or points bonuses. Apple has a completed market in existing Apple Pay users, with fans of the brand committed to signing up, and card experts suspect there are no plans to offer any kind of sign up bonus.
Secondly, the Apple Card is likely to experience significantly lower scams, thanks to the lack of card numbers on the physical card and the refund competition for customers using Apple Pay wherever possible. This means that many transactions will be verified by Face ID or Touch ID.
Third, Apple will have lower support costs thanks to things like the map view – which would reduce the number of customers requesting costs they do not recognize – and using chatbots messages.
Finally, although Apple will pay its customers an additional 1% to buy its own products, it's likely less than the swap fees it currently pays to other card issuers.
So make money from Apple The card will be easier for Apple than other card companies, with more of that interest income retained as profits.