Will officially appear in the US market this summer, Apple Card aims to give consumers a type of credit card easy to use, can be managed via iPhone. This card has many benefits, including competitive interest rates, no maintenance fees, and many features that help customers avoid debt or repay faster, and get the card within the day after applying for a card , turn it into an extremely attractive product for iPhone users.
According to many estimates by Alliance Bernstein, Apple Card does not necessarily have to bring potential revenue that is much higher than other services announced at the same time, such as Apple News +, Apple TV + and Apple Arcade. However, Apple Card may be a project that is highly profitable for the company, while the effort they spend, or the risks to suffer, is relatively small.
Even without maintenance fees, Apple credit cards will make money from transaction fees and interest from consumer accounts. For other co-branded cards, Apple will collect a percentage of its total revenue on its part – usually ranging from 5 to 10%, which may be higher for reasons such as: Apple itself is a high brand. Goldman Sachs is new in the credit card industry in general, and Apple has researched to integrate Apple Card with Wallet.
"The division is likely to benefit Apple thanks to their negotiating advantages compared to Goldman Sachs "
Goldman Sachs has met competition from Barclays, Synchrony, JP Morgan Chase and Citigroup, but these rivals have all withdrawn due to lack of profit concerns.
In terms of revenue, it is estimated that for the two largest current rewards cards, Amex Premium and Chase Sapphire Reserve, each card has an annual turnover of about $ 4 billion. Apple Card has the potential to achieve this level, because it has "brand" and the number of iPhone users interested in this card.
According to calculations, there will be 935 million iPhones used globally by the end of 2019. This is a potential number of basic users, but at the present time, this number is much less.
While US consumers are often richer than other markets, instant money refunds and a 2% refund rate for electronic bills will make Apple Card more attractive to users with revenue. low and medium entry.
Bernstein thought that Apple could earn $ 1 billion annually from Apple Card in 3 to 5 years if everything goes well, but the figure of a few hundred million dollars seems more reasonable.
Apple is even more profitable because of the risk and effort the company has to spend is almost nothing, in addition to integrating the functions for this card. While Goldman Sachs has to pay Apple to access its users and handle all operations, credit management, invoice collection and customer request processing, analysts believe this is which brings net profit to Apple.