Apple CEO Tim Cook and Apple Card
AP Photos/Tony Avelar
What’s in your wallet?
HOW TO SPEND IT

The most original thing about Apple’s credit card isn’t its app, fees, or laser-etched titanium

By John Detrixhe

Apple formally announced the details of its widely expected credit card today, which will offer things like cash back rewards, a whizzy app, and a titanium card with no numbers on it. While many of the features Apple is touting aren’t necessarily new or innovative, it is pitching something that’s increasingly rare in the digital world: privacy.

The tech giant’s card, a partnership with Goldman Sachs and Mastercard, rolls out this summer and will be tied to its Apple Wallet app. Customers will get 2% cash back for using the card with its Apple Pay service (cash back will be available on the day of purchase), and 3% when used to purchase Apple products directly with the company. Using the physical card at a place that doesn’t take Apple Pay gets 1% cash back.

Apple won’t charge fees (such a late fees or over-the-limit charges), and claims its interest rates will be among the lowest in the industry, at between 13.24% and 24.24%, based on creditworthiness. (For reference, the average US credit card charges 17.67% APR.)

The card’s app is somewhat humdrum. Its real-time views of transactions, categorization of spending, and customer support by text are pretty much industry standard among fintech companies. Apple says it will offer a range of balance-payment options and display interest costs in real-time, to help consumers make better financial choices. Some research suggests that people who use fancy financial apps actually make worse decisions with their money but, on the surface at least, Apple’s real-time data seems like a step in a positive direction for an American public that often struggles with debt.

Apple’s tethering of Apple Card directly to Apple Pay is meant to increase its mobile wallet adoption, which has been slower than some have expected, said Sara Rathner, NerdWallet’s credit card expert. Indeed, data from Loup Ventures shows that Apple Pay uptake in the US has been tepid, although it has caught on more successfully elsewhere.

The card’s most original feature is privacy. Apple says it won’t know where its customers have shopped, how much they paid, or what they bought. Apple says Goldman Sachs will use customers’ personal data to operate the card, but won’t share or sell it to third parties for marketing or advertising.

“Features like spend tracking and categorization all happen using on-device intelligence, not on Apple servers,” said Jennifer Bailey, vice president of Apple Pay, at today’s product launch event.

Apple CEO Tim Cook has skewered his rivals when it comes to data privacy, taking every opportunity to highlight Apple’s iPhone-centric business model, which stands out in a world where personal data fuels much of the digital economy. It could provide a selling point versus the likes of Facebook and Google which, incidentally, have their own payment services and make fewer promises about privacy.

This matters because using cash is still the most surefire way to ensure total data protection (membership), and the steady growth of digital payments has made transactions less private and more susceptible to censorship. Taken a step further, recent events like the Facebook-Cambridge Analytica scandal have demonstrated that the harvesting of personal data can pose society-level risks.

Privacy hasn’t been a big selling point for consumers, and Goldman’s access to the data shows that transactions still won’t be as private as in the old world of paper notes and coins. Even so, a digital payment service so committed to privacy is certainly a more important feature than a laser-etched titanium card, which Bailey described as “the most beautifully designed card ever.”