Apple’s brand new Apple Card credit card with Goldman Sachs could be a disruptive force in more than just the banking industry, according to two analysts at MoffettNathanson.
The technology device giant’s move into banking could enable it to give customers financing for new models of the iPhone, breaking a key relationship point between customers and wireless carriers such as Verizon and AT&T, Craig Moffett and Lisa Ellis wrote in a note to clients.
Building off an idea from industry blogger Jim Patterson, the analysts said that Apple Card and new SIM card technology could make it easier for customers to switch between wireless services.
“Any iPhone purchased with Apple Card would naturally entail monthly payments to Apple rather than to Verizon or AT&T. That would make the phone much more ‘portable’ between carriers. Coupled with the coming arrival of eSIM technology in Apple phones, switching between carriers for Apple Card holders could then be virtually frictionless,” the analysts said.
MacDailyNews Take: Bring on the frictionless competition among carriers!
It’s 2019. We already have eSIMs in our Apple Watches and iPads. Bring on the eSIM in iPhones, already! The more the carriers have to compete for business, the better! — MacDailyNews, July 29, 2019
Generally, when people buy cell phones from wireless carriers and make monthly payments, the wireless carrier makes an interest free loan to the customer. There is no reason why the customer cannot make such a purchase and just have the monthly wireless bill charged to AppleCard or any other credit card.
However, if the customer pays for the phone outright using the AppleCard, then he will either have to pay off the purchase by the due date, or make interest payments to Goldman Sachs.
How does that put pressure on wireless carriers? Most customers who want to make monthly payments would probably prefer not to have to pay interest on their purchase.
Those who like to buy their iPhones unlocked could buy directly from Apple, not get locked to a carrier, and save $20 through cash back….
It is possible that any Apple device purchased on the Apple Card could be at 0% promotional rate till paid off (payments applied to the promotional rate balance before ‘regular’ charges) like other cards offer periodically. This would not only encourage Apple device purchases but also generate interest on other purchases practically from day one till the ‘promotional rate’ balance is paid off.
This is an interesting point. I don’t know if Apple will do this, but now they have the opportunity to explore this kind of option.
I’m sure Goldman Sachs would love to collect interest. Savvy Apple consumers on the other hand may end up using the card for Apple products exclusively to avoid paying interest, somewhat defeating the purpose of having a general purpose credit card.
Apple offers the same 30-payments, no-interest plan that the carriers do. I got an iPhone that way. Now, buying a new iPhone from Apple with Card on Pay, you’ll get 3% cash back on the taxes and activation fee the day you get the phone. And I’m assuming there will be a way to make your monthly payments with Pay, each of which will get you 3% cash back. But I’m not sure about how to make the monthly payments with Pay.
Anyone?
Apple isn’t getting info banking with the Apple Card. It’s an Apple branded MasterCard, which terms were designed by and with Goldman Sax and Apple partnership. Think Amazon Prime Visa, Home Depot Card, Sears Charge Card, etc. AT&T has their own card.
What sets Apple apart is the integration with Apple Pay and token based ID connected to your account – ehhh the numberless, digital card. You don’t get a new card every x years. You get one card and it’s reset every so often or on demand.
What would be sweet and no one knows yet for sure, is if Apple adds 24mo interest free purchase on a new iPhone and accessories, at the time of purchase. But we have always been able to buy iPhones without AT&T financing. We have always been free to shy away from the “contract”.
I really hope they are correct though. Because we always need competition to keep offerings fair to the consumer.