Apple has begun offering its new credit card to consumers, but the Apple Card has a long way to go to be a material business driver for the company, a Wall Street firm said Wednesday.
In a report, Nomura Instinet said early reviews for the card are positive, but it will take years for the business to scale. The brokerage reiterated its neutral rating on Apple stock. “Initial reviews indicate the card offers smooth integration with Apple’s other apps, intuitive expense tracking, heightened privacy, and of course, titanium-level branding,” Instinet analysts Bill Carcache and Jeffrey Kvaal said. The report added, “The card may require years to reach our threshold for materiality, or above $1 billion in operating profit. Instead, we consider the card best viewed in a less linear fashion as another building block in Apple’s growing financial suite, alongside Pay, Wallet, Cash, and potentially, over time, Debit.”
Instinet believes Apple will next offer a debit card. “Since most customers are likely to pay the outstanding balance on their Apple Cards via their bank accounts, Goldman Sachs will obtain customer bank account information, which it could use to offer Apple Debit,” the brokerage said.
MacDailyNews Take: Apple Card will be more popular than most people think and it will spur the use of Apple Pay significantly.