I don't thing it is healthy to have big entities like this control fundamental services like payment processing. How long before the opaque governance of the App Store is applied to their payments offering? How long before activists start making this a new vector for deplatforming? Apple also announced a news offering (https://www.techradar.com/news/apple-news-plus) and I think the same concerns apply there.
Look no further than the recent issue where Patreon competitor Subscribestar had payment processors Stripe and PayPal stop processing their payments for _political_ disagreements with the purported beneficiaries of the donations through the platform. PayPal said that it was actually one of the underlying payment processors, and it was suspected to be MasterCard.
That incident was the first time I've ever taken the need for alternative payment processors very seriously.
I’ve been told political campaigns focused on MC/Visa forced a policy change on Fetlife (specifically which kinks you’re allowed to admit to being into) a few years back.
I’m not into the kink which caused it (and I won’t repeat it here) but that left a bad taste in my mouth. IMO, people should be free to discuss what they’re into, even when it’s something much more harmful than the kink involved.
Stripe de-platformed us because their payment processor (Wells fucking Fargo, paragons of virtue) didn't like what we were selling, which was fantasy adult toys. They tried micromanaging the complaint, asking if we could remove "flesh colored" options, but we weren't going to get dragged down into that. Ridickulous.
Imagine the guidelines they must be following. Somewhere there must be a rule written down that was once debated by a committee of pious folk that literally states that flesh-coloured¹ sex toys are not okay (but purple is fine).
1: So that's what? Anything from deep charcoal black to a subtle off-white?
Yep, it also drove them to take payments primarily via an e-check service, which promptly got owned and a huge number of FL users had to deal with fraudulent charges.
The payment industry as a whole is in the stone age.. ignoring the antiquated technology behind it all there are still a ton of industry discussions about even allowing now-legal medical marijuana dispensaries and things like that to become customers. Given that it all goes back to Visa/MC/Banks I don't expect it to change much soon.
Curious, what does that mean "risky google"? If you're avoiding seeing some graphic images, that makes sense. If you're avoiding searching it because of implications for google's tracking profile about you and how it might then rebalance future searches, then that's a pretty upsetting reflection on google / tech status quo, and fairly on-topic here. We shouldn't be afraid to seek knowledge like from a library, because of analytics, y'know?
Why would we assume Apple would be no worse. Apple has a track record of disallowing all kinds of media that credit card companies have much less issue with. You're generally free to buy all kinds of things with your credit card that Apple disallows in their various terms of service.
SubscribeStar was composed almost entirely of people banned from Patreon for various reasons, including things like dropping n-bombs in videos and blocking search-and-rescue boats from saving migrants in the Mediterranean. It's not surprising that big, mainstream companies don't want to touch that with a ten foot pole.
Patreon has also banned various leftist sites for things like doxxing and posting instructions on how to commit terrorism, but that doesn't get as much attention for some reason.
> Patreon has also banned various leftist sites for things like doxxing and posting instructions on how to commit terrorism, but that doesn't get as much attention for some reason.
For left leaning people it takes doxxing and instructions on how to commit acts of mass violence to get banned.
For the opposite ends of the political spectrum people have been banned for months-old videos - not even on a channel that the banned person runs - in which someone uses a swear word to tell the alt-right that they "are acting like n_____s" (which I interpreted as a deliberate word choice to emphasize irony that the alt-right is behaving how they often portray and see African Americans. Sargon's explanation is roughly similar). Meanwhile there are plenty of people who use the same slur regularly, some even in the usernames of their social media profiles. There is zero doubt in my mind that Patreon decided to ban Sargon on the basis of his political views first, then searched for something to justify the ban.
> Legally speaking you're not allowed to insult anyone, wether as a n-word, nor as a nazi
This is absolutely false, at least in the US where Patreon is based. Out of curiosity where did you get the idea that insults are illegal (assuming you're talking about the Unites States)?
Libel is much more specific than just insults. Libel entails knowingly making false statements to harm someone's reputation. It's also much harder to prove than most people think.
Someone tried to sue for calling someone a Nazi but lost [1]. In this case the defendant claimed to have been presenting a hypothetical. I have not been able to find a successful defamation case due to someone being called a Nazi in the US. Not to mention it wouldn't affect calling a black person a n____r because such a statement is not factually incorrect (as the slur is a derogatory term for a black person).
> I am not alt right, I am not a nazi. I've been on @SubscribeStar since @Vice terminated my @Patreon account in May. I haven't even recovered from that hit to my income. I am tired of being acceptable collateral damage in your culture wars. You sacrifice your livelihood- not mine.
Sargon of Akkad told a group of white neo-nazis they were a bunch of "n-words," ironically, in the context of accusing them of having the same poor behavior they attempt to associate with black people. If you're familiar with the entire rest of his body of work, he is a vehement liberal in opposition of any such identity politics. He said this on somebody else's channel, not only off of Patreon, but off of his YouTube account altogether.
But all that being said, it's all irrelevant. Let's say he said the n-word maliciously and was a racist, is it the role of MasterCard to prevent that person from being able to pay for a burrito? To get a paycheck from their legal employment? Why can't the expectation be that MasterCard is neutral up until the point of legality? There is a really bad authoritarian trend on the left wing to go after absolutely every neutral cog in the machine. If Reddit doesn't ban /r/The_Donald, Reddit is right wing. If Twitter doesn't ban TERFs, Twitter is right wing. Now payments? Are we going to get mad at the government for letting Been Shapiro drive on their neutral roads?
Deciding 'whether to do business with someone or not' is one of the kinds of freedoms capitalism is supposed to protect.
Outside of a standard set of specific reasons for which it is agreed to be illegal to refuse business (race, sex, orientation etc..), no business is supposed to be able to be compelled -by the government- to associate or transact with another. Instead, boycotts are used by the public themselves (rather than via government strongarming) or by company-to-company action to persuade companies to adjust their behaviour to meet expectations of what is ethically appropriate.
In arrangement, the expectation is not that companies are 'neutral' but that they are sufficiently moderated by public will. This freedom not-to-transact is what allows things such as boycotts of Apartheid South Africa, boycotts of companies that abuse their workers or run sweatshops etc.
There are plenty of ways to rearrange things outside of a Capitalist model, but once you decide to have Capitalism but 'prevent boycotting on political grounds' you're basically suggesting that Capitalism ought to be stripped of one of its extremely few mechanisms for ethical feedback. The implications of that ought to scare you.
The one big issue you're ignoring here is that the effective monopolization of various industries is opening the door to governmental action without the necessity of law. Consider something like Visa and Mastercard both deciding to block donations to Wikileaks. Was this an organic action or was it the government aiming to attack perceived enemies by exerting their clout behind the scenes? It needn't be some grand or secretive action by the government either. Imagine a single individual, perhaps a senator or an influential former secretary of state, phones up Mastercard's chair and simply tells him they'd be quite grateful if Mastercard would cut transactions to Wikileaks. What are they going to do?
This is the big problem with both the massive scale of certain businesses, their extensive interweaving with government, and of course monopolization.
I do think that's a very important problem, and yes I agree it is more than likely the US Government was responsible for that. In cases like that I think the government should be dutybound to make its actions public. It's possible the govt announced it at the time, but if so then I am unaware.
Where did I say that it should become legally mandated that MasterCard associate with anybody? Not only do I not think capitalism does/should compel them to do that, I think that capitalism explicitly doesn't compel anybody to do anything.
What I'm asking is if we as a public really want our payment processors to be making these moral judgements? That doesn't mean I think they should be compelled to do anything, but I certainly think it's cause for concern, and call for an alternative that IS willing to behave as a neutral party. I don't want the noise of what is effectively a pipe to be making arbitrary political judgements when deciding what is allowed to pass through.
Now, publicly funded banks, that's a different question. I absolutely expect neutrality within what is legal from our government institutions.
> What I'm asking is if we as a public really want our payment processors to be making these moral judgements?
If this action was completely unprompted, sure, but I think we're talking about payment processors choosing not to associate with people who have already been the subject of boycotts on their previous platform.
A better example would be WikiLeaks which enjoyed a fair amount of public support at the time Visa etc declined to process their payments, as we have reasons to suspect that the pressure on Visa to do this may have been from the U.S. Government.
By contrast, there have already been numerous public protests against people hosted on the SubscribeStar platform.
Do you think that thieves and violent criminals should be allowed to exchange money for goods and services or is that a punishment you reserve for the worst of the worst, those who make offensive jokes?
> We need a post-office bank and payment processor, which will then be legally subject to the First Amendment.
Postal money orders already exists, and are exactly as expensive and inconvenient as you would expect.
The actual problem is KYC laws that require payment processors to do the job of the police and refuse service to customers under purposely vague corporate policies without due process, instead of having the police do that job and only have payment processing service denied with a court order and an opportunity to contest it under the law.
The thing is I don't expect the post office to be expensive and inconvenient. They work wonderfully in many countries for basic banking services to all residents.
What is awful is that I expect it to be inconvenient and awful in the US because there is this idea that anything the government does will inevitably be bad and then there are multiple political parties that try their hardest to make that idea come true when they get elected.
There's no reason for the system to not work in the US other than people trying to sabotage it to the detriment of large parts of the population so their personal tax burden is lower since they don't believe they ever will need the service.
There is a specific reason the US does everything poorly. The US is the EU.
The EU in general doesn't provide government services, the UK does, France does.
When you're already the size of a state, there are basically no more economies of scale to be had by doing something at the size of a union of states. Your fixed costs are already being amortized over something like a million people or more, so the variable costs already dominate and spreading the fixed costs over even more people is past the point of diminishing returns.
But it's not past the point of expanding overhead. So suppose you want to do this in the US -- have the Post Office compete with Mastercard. You propose the bill.
The banks hate it because it's them you're competing with, they have billions of dollars, but more importantly they're a major industry in some states (e.g. New York) which have large numbers of legislators. So they not only use those votes against your bill, they trade their legislators' votes on other bills to get more votes against your bill. Moreover, their legislators are the ones who care most about things like finance, so guess who is on the finance committee.
Then you have states like Virginia where the major industry is defense. They want to destroy privacy protections, because you can't get a lucrative government contract for hoovering up and data mining financial data if you're not allowed to hoover up and data mine financial data. Guess who is on the committees related to that sort of thing. And New York is all for that -- data mining financial data for private purposes is lucrative too, and that amendment also makes it harder to pass the bill they don't like.
Then you have states where the government itself is a major employer, and what they want is more government jobs for their people. So they don't want your program to be efficient, they want it to be labor intensive, which is the opposite. But then it costs more, charges higher fees, requires the users to fill out more forms to use it etc. You may also see private companies looking for the same thing, because they then sell a solution to it, as with Intuit opposing tax simplification.
And so it goes down the line, at each stage making the program worse and harder to pass, until it either dies in committee somewhere or gets passed as some horrifying abomination that makes things worse rather than better.
This isn't some individual proposing to make the bill worse on purpose to demonstrate the ineffectiveness of government, it's a structural issue that produces that outcome systemically.
Now you expect I'm going to suggest having the individual states do it. There are some states that aren't full of big banks or spooks or government bureaucrats, all we need is for one of them to do it. Which would work if they weren't subject to the same problematic federal laws as private enterprise is, created by the same problematic process, which is the reason the market isn't already taking care of this.
In order for the states to do things better, first the feds would have to stop standing on their feet.
Postal banking is awesome for a lot of reasons. For one, post offices are pretty evenly distributed throughout cities including in low-income neighborhoods where banks tend not to be. There's a lot of precedent including the UK (https://www.postoffice.co.uk/everydaybanking). I hadn't considered first-amendment though, very interesting.
As long as they aren't stopping other banking, I'd be happy to see the post office extended to offer banking services. Just like I can use FedEx for mail.
First guy that mentioned post office banks to me was a British expat who also said that the post office checking account was really useful when he was a starving student. He was about 1500 pounds overdrawn when he graduated and they were still cashing his checks.
Since then I've seen post office banking as a way for getting poorer people out from under the thumb of exploitative banks, credit card companies, and check cashing places. Consider as well why should the government give a cut of EBT's cards and unemployment transactions.
Well you kind of have that. It's called the central bank (Federal Reserve Bank in the U.S. case) that processes bank account transfers without any restrictions that would go against the First Amendment. The extra stuff that you get with private companies such as Visa, MasterCard and PayPal is just that -- extra.
I always assumed that cryptocurrencies is exactly how SubscribeStar has solved it for their audience (if you mean "people" in general, them most of them aren't wondering about anything because they don't consider it a problem to begin with, at least until something they care about gets consistently censored).
So I went and looked up their payment options. And sure enough, they have a page on that. Which has the following notice:
"In order to stay compliant with our strategic credit card processing partners' policies and due to recently tightened regulations on the cryptocurrency circulation for the US-based companies, we are going to halt all support for cryptocurrency payments on this site for the time being."
What is this all about? Are they saying that payment processors will refuse to work with organizations that accept cryptocurrency? But then how e.g. Coinbase works with credit cards?
It is quite a complex topic. For example there are credit card processing companies for cryptocurrency related companies, but they have very stricter customer onboarding processes and also higher fees. For many banks who target mainstream customers it is just easier to block all customers who deal with cryptocurrencies than to create specialized producst/risk management/compliance processes for them.
Cryptocurreny processing is expensive as hell. Not to mention very frustrating when the client finds that the crypto bought with 1000$ values $800 on the merchant /processor payment page.
I understand why banks don't want their credit cards used to buy cryptocurrency, and then deal with all the chargebacks. But in this case they're seemingly saying that they can't accept cryptocurrency for some service, because doing so prevents them from also accepting credit cards for that same service, where the service itself has nothing to do with either.
How so cryptocurrencies haven't solved anything? If someone has done a transaction with cryptocurrencies that brings value to him, isn't that solving something? Your claim is just very probably totally untrue - I think Bitcoin etc have been very useful for some small group of people for quite a long time already. However the adoption just isn't that big. Somehow people seem to think that cryptocurrencies have to replace the existing financial system to be useful. Meanwhile they can be just be used by 100 people worldwide and still be useful.
Cryptocurrencies accomplish nothing that wasn't already possible before, usually faster, cheaper and safer. Just because someone uses an alternative doesn't mean it's solving a problem, and in this case it's just creating more issues.
I have used Bitcoin to buy various things and used it as a savings instrument, I see that it has solved problems for me. Of course I could use other tools for that, but if you think Linux is superior that doesn't invalidate someones experience who is using Windows.
Generally there seems to be lots of people who don't use cryptocurrencies and think that they don't solve any problems - OK whatever, don't use them, but there are loads of people using cryptocurrencies for whatever and your opinions are not objective measure on their value.
Bitcoin allowed to accept donation for Wikileaks since 2011 when Visa and MC blocked them. (Nowadays they accept also more privacy preserving currencies like Monero or ZCash)
Bitcoin allows people in Venezuela to avoid wealth confiscation on the borders, either when they are running away or when they are sending money back home to family.
Bitcoin allows people in Iran to transact with outer world.
Bitcoin allows people in India to keep their wealth in face of demonetization.
There are many problems that Bitcoin solves for real people and real companies every day.
Just because you aren't one of them, doesn't mean they don't exists.
Underutilised? Modern CPUs are designed to be underutilised. Or more accurately, designed to be bursty. It isn't like they are executing NOPs at full speed. The heat they generate isn't free.
Paypal has been completely atrocious at this since its beginnings.
Many horror stories of project cancelled and companies closing because Paypal had decided to close their account.
Yes that scared me. Extreme activists can cut you off from access to payment processors. We are a relatively cashless society and you are potentially at the mercy of the mob to survive. The mob’s definition of a Nazi becomes broader every day. I truly believe the pendulum is swinging the other way however. Once corporations realize that, this should stop. 4 years ago the majority stood with the mob because they like me believed the mob had decent ideals but were overzealous. Every day more people discover that the mob are morons on a power trip and a sense of morality more infantile than good/evil children stories.
Apple said they've engineered the service such that Apple does not know what you're purchasing or even what vendors you're shopping at. If Apple doesn't know this, they can't very well apply arbitrary rules to it.
Essentially, in this case, the underlying bank (Goldman Sachs) handles all the finances and the partner (Apple) lends their name/brand and receives a small kickback on card activities.
My understanding was that Goldman Sachs will have that information and they will be responsible for fraud prevention etc. -- they just won't share it with Apple.
Goldman is a client of Apple's. It's possible that they do some shady shit, but it's also possible that they don't want to fuck up their relationship with the world's most valuable company or jeopardize their entry into the consumer space.
Their profit motive might save them. Or it could be a disaster, who knows. My guess is that Goldman would trade on the aggregate data
Wasn't there a lawsuit that an investment bank (can't recall if it was Goldman Sachs or not) can deceive its clients and not disclose that it has a competing or directly contrary interest?
And then there's this, and a dozen other stories about Goldman Sachs deceiving its clients in the past.
FWIW, those rules are relatively nuanced. It's not like someone ruled that Goldman can deceive all clients at all times in all transactions.
Typically it comes up in places where there's a question of whether the bank is responsible getting their client the best possible price in a transaction or whether the bank is acting as an arms-length counterparty who happens to be taking the other side of the transaction. It also depends on the sophistication of the client and whether it's a transaction where the client should expect Goldman to be bullshitting them.
Goldman acting as a bank for the Apple credit card is completely different from Goldman acting as the counterparty in a large FX hedge or bond deal.
> Goldman is a client of Apple's. It's possible that they do some shady shit, but it's also possible that they don't want to fuck up their relationship with the world's most valuable company
It's hard to argue that Apple can keeps Goldman Sachs on a leash. GS can't get a worse reputation that it already has, shaming them is worthless.
I think they are trying to with the Marcus brand. Once Goldman became a bank holding company, it made it hard for them to operate a large prop trading unit and other more alternative areas. I think Goldman felt that since it had to operate more like a bank with a bank charter, why not become a bank? It would be interesting to see the financials behind the Apple & Goldman deal as Goldman probably needs Apple more than Apple needs Goldman given the CAC on banking is very high.
They said that the information is on your device, not on Apple servers. So I presume that they/GS can extract this information from the device under a valid legal claim.
Apple can't extract information from your device, even under subpoena. They'd have to push an OS update that explicitly changes what they do to start sending that info to Apple, but the US legal system doesn't allow the government to compel them to make that kind of change.
That said, if the data is available in your iCloud backup in a form that can be read by other devices, Apple can presumably extract that data under subpoena. If it's in your iCloud backup but encrypted with a per-device key (like your non-iCloud keychain entries), Apple cannot extract that because decrypting the backup (which they can do) isn't sufficient to decrypt this per-device-encrypted data.
All that said, if the government wants to know your spending history, it would be simpler just to subpoena Goldman Sachs.
> They'd have to push an OS update that explicitly changes what they do to start sending that info to Apple, but the US legal system doesn't allow the government to compel them to make that kind of change
I'm not quite sure exactly what Australia's laws actually let them do regarding Apple, but what I am sure of is if Australia tried to compel Apple to add a backdoor to iOS, Apple would stop doing business in Australia rather than comply.
Their position in China is not offering iCloud at all is no better than offering iCloud where the data is managed by a Chinese company. Importantly, this does not affect anyone outside of China. This compromise to follow the law sucks, but it doesn't fundamentally weaken protections for anyone else. And of course iCloud is optional and can be turned off by any Chinese citizen who doesn't want their data stored on Chinese servers.
Altering the OS to install a backdoor is a much different beast. It's non-optional, fundamentally weakens the security of the entire OS, and affects all customers everywhere, not just Australian citizens.
Also, if Apple did withdraw from Australia, any Australian citizen who wished to use an iPhone could still acquire one from overseas (though this is admittedly a fair amount of effort) and they'd continue to have a secure computing experience.
The legal system lets them say "you already have the information? Great, give it to me". It doesn't let them say "you have to redesign your systems to collect information that you explicitly told your users you aren't collecting".
I don't have a direct citation for you, besides having seen this spoken about before, but a simple thought exercise should prove it: If the government could compel that sort of thing, then we wouldn't have end-to-end encrypted chat (including iMessage) and the government would have already compelled Apple to give the government a backdoor into iPhones.
The FBI took a different view in a recent court case referencing the All Writs act of 1789 https://en.wikipedia.org/wiki/FBI%E2%80%93Apple_encryption_d... but dropped it when they unlocked the device by other means., and the issue hasn't really made it through the court system, so it's unclear what the law requires.
Until a federal case gets to the appeals court level it basically won't establish any binding precedent in other cases under stare decisis.
Good news is the FBI doesn't write the law. My recollection is the general consensus was the FBI was severely overreaching and was going to lose their court case.
I think under the construct that computer code is a means of expression protected under the first amendment, the US government requiring Apple to implement a code change would be considered a form of compelled speech.
I don't quite understand that, since the linked article says Apple will "use machine learning and Apple Maps to label stores that you use in the app, and use that data to track purchases across categories like “food and drink” or “shopping.”"
What do they gain from offering the card if they are not harvesting transaction data? Is it possible that this is some legal gymnastics (i.e. Goldman-Sachs receives the 'Apple doesn't know' data and promptly send it over to them under an opaque 'we share information with our affiliates' clause)?
It does seem like a lot of work and potential risk if the sole purpose is to increase user dependency on the Apple ecosystem.
They get a percentage of every transaction (small, but it is about the aggregate for them). Mostly for Apple this is about pushing people who are using ApplePay to back it with a credit card that Apple gets a piece of, rather than the one you already have a piece of. So they get the small chunk from being in the loop with ApplePay, and now a small chunk from being the sponsor of the card.
Apple has been very focused on not being a big-data company. Any sort of back-end shenanigans would be so damaging to the brand of information safety that they have been building as to be unworth any potential profit.
It's a foot in in the global financing system. Billion people buy their products, and given their price, I'm ready to bet that the number of people who finance their purchase instead of buying with cash is not insignificant. That's lots of interest payments.
Once they have a foothold in the finance sector they can start financing their own devices and capture that revenue, instead of letting it slip to third parties.
This makes incredible sense. Lots of large companies have financing services that are very profitable. Finance is one place where it's much easier to enter than self driving cars.
Now I'm a bit sad I don't own any apple stocks.
With this game plan they can increase their leverage in the consumer market enormously.
Apple has/had a deal with Barclays for financing purchases from the Apple store. They still have to cut Goldman in on the new card, so not really sure how much better it is for them on financing Apple purchases.
I believe this whole thing is designed to promote adoption of Apple Pay. Apple already gets a kickback on all Apple Pay purchases, so they don't even need to get any kickback on physical card purchases when the higher rewards for Apple Pay means card owners will push for better Apple Pay support.
Previously with other cards, using Apple Pay is just a matter of convenience for the customer. With the Apple Card, it's a matter of getting more cash back, so consumers are now financially motivated to prefer vendors that support Apple Pay.
Apple likely save quite a lot from small transaction ( $0.99 ) if it was done on Apple Card.
Roughly $50B are spent on App Store, and even more with growing number of Subscription along with other Apple Credit Card usage. That is a potential of $100B+ transaction volume.
It will likely be another entry point for Apple Cash, sending and receiving money from friends.
They save merchant fees when the card is used on their products, and collect them when the card is used elsewhere. Same reason your bank issues a card, really. Though mastercard's still the payment processor here.
Usually a percentage of each transaction and/or flat fee per cardholder or signup and/or a percentage of fees and interest paid. The exact details on these agreements are rarely published.
Agree that health skepticism is warranted here but it might also be that they are trying to re-think the credit card experience to improve it for everybody.
Because of the card, data must be in the cloud but it is most likely encrypted and keys are on your device that is why Apple can claim that they don't know anything about what you buy. This doesn't change the fact that GS and MC does know where are you shopping. The only good thing about this card are fees and cashback, everything else is either nothing new or special (not sure about Apple card, but where i am from most CCs come with travel insurance as well).
> I don't thing it is healthy to have big entities like this control fundamental services like payment processing... How long before activists start making this a new vector for deplatforming?
You're misunderstanding how card networks work a little bit here. This is a credit card, not a payment processing service. Two different sides of the network. "Deplatforming" refers to getting kicked off a given payment processor, which is an entity that gives a merchant access to a card network (in this case Mastercard).
Perhaps issuers like Goldman Sachs could start banning their customers from using their card at certain merchants. But this wouldn't come from Apple -- they've already said they've engineered themselves out of that kind of control.
My bizarre experience attempting and failing to get Apple to refund erroneous charges to my credit card has reinforced my perspective that companies of this scale cannot be trusted with operations outside of their core competencies, and that any financial product offerings from non-finance companies must be avoided like the plague (not to say that I'm any fan of fintech...). I cannot imagine how Apple's foray into financial products / business can result in anything other than the incorporation of all of the destructive incentives and bad behaviors that come along with big banks as the profits stack up over time. God help anyone who needs customer support from a giant tech company when some unclear policy document or bug leads to a financially-ruinous mistake being made on either end of the relationship. Prediction: the little people will be crushed and have no recourse, just like they are when Google closes their email accounts without warning.
In my case, Apple were attempting to charge me a monthly fee for an app that I installed last year before I ditched my iPhone. After using (and paying for) the app for a month, I realized I didn't like it and declined having a monthly subscription moving forward. After terminating my account with the app and uninstalling it Apple continued to charge me for it for months afterward. Repeated escalations in Apple's customer service labyrinth resulted in a massive amount of wasted time and, ultimately, an admission on their part that they didn't have a clear answer for what was happening or what I did wrong (one customer support person even told me that the same thing had happened to him once upon a time). Despite that, the relevant policy document they referred me to strictly prohibited me from being refunded for the erroneous charges. In the end, the only thing that saved me was being able to turn to my credit card company and flagging the months of charges as fraudulent. In this case I got all of my money back, but the experience really makes me wary of the idea of a big tech company being involved in my finances.
Payment platforms, including Visa and Mastercard, have deplatformed merchants, are currently deplatforming merchants, and will continue to deplatform merchants, for all sorts of reasons, since day 1.
This sort of deplatforming happens for moral reasons (adult content), discriminatory reasons (Suppression of gay activist movements in the 90s), political reasons (Suppression of IRA/ISIS symathisers), legal reasons (Enforcing international embargoes - ie, Iran).
For some reason, though, techies get up in arms when tech firms start doing this.
We get up in arms about it because we think that it's unethical in all but the last case. Society as a whole should be publicly deciding which personal transactions are forbidden, not the payment processing platform.
seriously though, i don’t really think it’s in a company’s purview to promote those values, otherwise they’d let their employees vote on who their ceo should be or wether their jobs should be outsourced or not etc... it definitely is in their purview to maximize their profit and at least in the short-term it would seem banning is “easier” (aka profitable) since it quells any “controversies” quickly enough...
please note, i’m not defending tech companies or payment processors banning merchants etc, just stating how i see it for my limited experience...
>seriously though, i don’t really think it’s in a company’s purview to promote those values, otherwise they’d let their employees vote on who their ceo should be or wether their jobs should be outsourced or not etc... it definitely is in their purview to maximize their profit and at least in the short-term it would seem banning is “easier” (aka profitable) since it quells any “controversies” quickly enough...
Indeed. I may not support the political views of (checks notes) ultra-nationalist furries, but I damn well think in a free society, their right to (checks notes) draw furry pr0n with Nazi flags in it should be abridged only by democratically discussed and broadly supported hate-speech laws.
An "ew no" to one is an "ew no" to all!
Or, a little more seriously, if we're not going to go through with actual social control over these decisions, we shouldn't control them at all. The lived experience of freedom is simply having the smallest possible number of choke-points between you and what you want, subject to not violating anyone else's rights or doing anything so morally horrific it was actually banned by the government (eg: organ trafficking or whatever). Our society needs to stop accepting that privatized, for-profit choke-points somehow give us "more freedom" than a law banning the choke-points (ie: common carrier regulations, First Amendment restrictions on state action, etc).
Apple's partnering with Goldman Sachs and Mastercard to do payment processing, I don't think Apple themselves are doing payment processing per se, neither they are certified to do it. What they can do is to generate alternative account numbers and passing that along with transaction details to Goldman Sachs(which is a bank)/ Mastercard (top 2 payment processing network) for actual payment processing.
Apple is using Mastercard as the rails, Goldman as the issuer, and another company is the processor. Therefore, it isn't really doing any of the payment processing, but it is more similar to a Nordstrom's or Saks' card.
I think Apple is hoping that the Apple card will get more users to adopt Apple Pay at the point of sale vs. dominate payment processing. Apple collects a small merchant loyalty fee when someone uses Apple Pay at the point of sale, even in cases where the card being used is Amex or Chase. My guess is the overall adoption of Apple Pay is a bigger win for Apple than the card itself. I am not sure there is much cause of concern here yet as people like their CC points, perks, and rewards? It doesn't seem like Apple has leverage here unless everyone stops carrying credit cards?
Banks are also much more heavily regulated than tech companies.
Yes, they've mostly captured all the regulators at this point so it's like the foxes running the henhouse, but at least in theory that's how it's supposed to work. . .
This isn't as big of a deal as you think, this sort of arrangement is the same as when an alumni association, sports team, or charity offers a credit card.
Yes, and ultimately Goldman Sachs is a bank and will be held accountable for anything that happens. This is a GS product that Apple gets a significant cut of.
Retail banks were on the front lines making the liar loans that got everything started. Investment banks wouldn't have had any bogus mortgages to bet on without retail banks originating them.
The decision to use GS is highly dilutive to Apple's brand.
I get that you're trying to tell a morality tale in order to determine who the bad guy is, but there wasn't "a bad guy" causing the last recession. "Retail banks were on the front lines making the liar lones".... and millions of creditless idiots were buying houses they couldn't afford.
You don't need the ball when the chain wraps around the whole world.
My point is that "much more regulated" retail banks don't behave any better than the other players in the financial system. That's not a morality tale it's a fact. If the financial crisis didn't convince you certainly Wells Fargo should have.
Isn't it much worse to have big companies in a heavily-regulated industry where those big companies largely control the regulations? Surely they will influence the regulations to increase barriers of entry into their industry.
I don't think this is very different from Bank of America or Chase running a payment processing system.
Both issue cards, and run two of the largest credit card processing systems. Bank of America Merchant Services and Chase Paymentech.
Most smaller providers still depend on one of those larger banks networks to process transactions.
You generally always need an acquiring bank to issue cards or process transactions. I believe this is the role of Goldman Sachs in this Apple news.
(Source: I worked at Square for 6 years, and my teams were directly responsible for the network integrations to connect to those merchant acquirers so we could process credit cards.)
I agree we are already exposed to this problem. Visa and Mastercard already make judgments about whom to support and whom to disallow. This is dangerous, especially because they are willing to succumb to the Internet outrage machine and pressure from loud activist groups to make these decisions.
When a platform is large enough (or has to be inherently large due to network effects), we should ensure (through regulation perhaps) that they act neutrally and provide service to everyone except where the law explicitly disallows it. That is, they should behave as a "dumb pipe" and not curators.
They isn't any neutrality, at least in the US. We've watched Visa/Mastercard/Paypal and others take down people they politically disagree with. Look at Paypal + Patreon for another example.
What's currently in the pipes to help fix this? Sure you can always support someone by mailing them a money order or cryptocurrency, but that is a huge hindrance to most people. It can cripple groups that are political unpopular. 20 years ago, that might have been gay rights groups.
Personally, I think we need to have state intervention.
The American finance and payment systems are a Rube Goldberg machine. Too many layers of middlemen adding cost and clunkiness; technology which was barely a good idea in the 1970s. But too many middlemen with a stake in it for anything but the state to blow it out.
I could imagine a system where everyone got a basic bank account for life-- each SSN and EIN is also an account number. The account is managed by the state as a public service, and you can assign it to a local brick-and-mortar bank to handle in-person banking. There would presumably be competition for the business.
That way, everyone would have guaranteed access to direct-deposit payroll and ACH-style-but-less-of-a-boondoggle electronic funds transfers. Push and pull payment APIs could be part of the state provided system, with enormous economies of scale driving the transaction price to essentially zero. Since the underlying service is state-run, it has to support any legal business purpose or the courts will shred it.
The financial tech sector is then freed from having to reinvent basic transfers and accounts again and again, and can focus on value-add services.
You could also argue that having multiple big entities doing payment processing is better for everyone to the extent that they are competing. I mean, Mastercard and Visa are undoubtedly going to pull every lever at their disposal to take out Apple. (And to take out Amazon and Walmart as well if they decide to jump into this thing.)
So rather than wishing that Apple were NOT a payment processor, I guess a better idea is to hope for the Walmarts, the Amazons, the Targets, etc to all jump in and join the cage match.
> Mastercard and Visa are undoubtedly going to pull every lever at their disposal to take out Apple.
The Apple card isn't competing with Mastercard and Visa -- in fact, it uses the Mastercard payment network. It's competing with credit cards issued by other banks on top of the MC and Visa payment networks (and AmEx/Discover, which unlike MC and Visa combine the payment network and card issuing).
I doubt the other banks are too afraid of Apple though, I didn't see anything so compelling about the Apple card that would cause it kill other credit cards. It's a slick product, but not game-changing the way that e.g. the iPhone was to entrenched phone makers.
>I doubt the other banks are too afraid of Apple though, I didn't see anything so compelling about the Apple card that would cause it kill other credit cards.
Interesting. I thought it offer fairly good Cash Back, no Fees, no hassle, ease of use. Even if it manage to reach 10% of the US iPhone users it will be a serious damage to other CC. While I may not get the best Rebate and Points when using Apple Card, I don't think those few percentage are worth it for my privacy.
Apple hasn't patented cash back, no fees, or ease of use. The other banks are free to copy most of these ideas if they're prepared to.
Look at the personal finance scene in the UK—it's one of the more vibrant markets for banking right now with the likes of Monzo, Revolut, Monese, and countless others. Convenience and simplicity has prior art there.
But none of them integrate as well as Apple Card. And none of the other brand are as trusted as Apple. Unless other big banks offer something similar, people will choose a well known brand that offer these capabilities and not some unknown ones.
Then Visa will pull every lever at its disposal to take it out.
It's also disappointing though, because it means Apple is not competing as a separate entity. What we want is for Apple to jump in be an actual credit card company. Then for all of them to try to destroy each other. (Unfortunately, now that I think about it, there are probably legal reasons that Apple is restricted in this regard. That's a shame. Basically means that it's Mastercard and Visa forever.)
Yeah I mean, this is what cryptocurrency is supposed to help solve and does for people willing to jump through the hoops. Instead of waiting on corporate overlords to enter a ridiculously relegated and bureaucratic mess, we have the open source community actually moving forward with ideas (ones no one seems to like on HN because it's not as simple or convenient, not that Linux was easy to use when installing Slackware from a bunch of disks) and almost no one wants to embrace them, rather just shit on them here.
I'm fully aware this is an unpopular opinion here, but cryptocurrency is one answer to the conglomerates everyone is complaining about. Is it perfect, or even very good? No. But I use it regularly on major merchants and get stuff delivered without much hassle and pay for my VPSes without trouble.
People want an alternative that is as good as Visa/MC without the conglomerate control. That is not going to happen. You can't get 100% of the convenience of the major processors with 0% of the problems.
I'd wager that Google, Mastercard, Visa, and AT&T each know way more about me than Apple does. That's not even counting companies like Amazon, Target, etc. It seems to me that with respect to privacy, Apple is the least of my problems.
if you're using their products, why would they not know anything about you? using their phone, app store, itunes, news app, maps appointments.. maybe im missing something? I'm not saying they have your purchase history, but they have a lot
Apple have built up a reputation for not knowing this about me as a consumer.
Maybe they do know lots about me, maybe they don’t. A significant part of their public reputation rests on their respecting privacy concerns however. So if it turned out that they were secretly collecting data on me they would take a hit to their public reputation and (very likely) their bottom line.
They are very much incentivised to keep my data private and imho that offers a strong likelihood that they’ll actually do so.
So you did inform yourself about Apples technical implementation of those services and the implications for privacy, or did you just make an uninformed guess to post something?
This card specifically I... uh wouldn't be too worried about. It's a generic 1% card with a couple of apple specific gimmicks. My citi doublecash is 2% on everything as long as I pay the bill off each month (which you should). Chase sapphire reserve is also a better card if you travel and are willing to pay a fee.
Fortunately there are a lot of banks and a lot of credit cards. There are only a few credit card networks, but this doesn't make things better or worse.
Here's a gut check question: Do you think that the average individual politician/regulator is more or less influenced by the desires of mega-corporations than the average individual voter?
For those of you concerned about the "antitrust" aspect here, the specter of Apple controlling everything... Keep in mind that Apple has had a partnership-based branded credit card for years: the Barclaycard Visa with Apple Rewards. There is nothing fundamentally new in Apple offering a credit card.
What's new here is they're tightly integrating it with Apple Wallet and in some aspects driving a better deal (like eliminating fees and points and data brokering). Overall I would characterize their offering as a "competitive" rewards card. But what's really distinctive here is the elegant Apple-designed UI around managing your spending and interest charges and rewards, which looks exceptional.
The other really clever thing is how they've leveraged the iPhone to improve the security of the backwards-compatible physical card. For non-ApplePay e-commerce they can rotate the CSC/CVV number you look up on your phone (since it's not printed on the card). And they can just reach out to you through iOS with suspicious transaction notifications and strongly re-authenticate you, instead of relying on antiquated robocalls.
One question I have is whether the card will have a stripe on it or just a chip. Traditionally merchants would be liable for fraudulent swipes without properly-checked signatures. If the signatureless card supports swipes, presumably Goldman Sachs would need to take on that liability now. Maybe that explains why rewards are 1% on physical card transactions instead of 2%.
Ok thanks, and to follow up I forgot that liability for swipes shifted to merchants a couple years ago regardless of signatures. That is, if a customer has a chip card and the merchant runs it as a swipe then they’re liable regardless of whether the signature matches.
Having said that, that doesn’t mean every issuer is going to come after merchants for this fraud... it’s typically the little mom and pops that haven’t fully migrated to EMV chip terminals. So maybe the lower rewards gives Goldman Sachs more leeway to be nice.
I love the app used to manage spending and paying your bill. It'll definitely be super easy to stay on budget given the fact that you'll have immediate access to up-to-date spending and trends, whereas if I want to do that with my Chase account, I need to login, run numbers, etc.
There seems to be a subfocus here about helping you manage your spending, which I can appreciate. The problem with ease of spending money is ease of going into debt, I think I could make this work for my wife and I fairly well, and easily at that.
Of course, the practicality of this for each person depends on their typical spending patterns and how often they can use Apple Pay in the first place. If you shop at places that don't accept it, you're pretty much out of luck.
Interesting foray into a gigantic industry that loves preying on people's inability to be responsible, though. I can think of a lot of people who could use more oversight with their spending.
Though very few and far between at this point, I'd say there are still a few times a year when I explicitly need to swipe a magstripe on my credit card - most recently a rural gas station in the California desert where I was seriously dependent on being able to fill up a tank.
I think many people, myself included, would still consider a credit card without the option to fall back to magstripe a nonstarter for their primary physical payment method.
I still see many, many places that have chip readers, but the slot is taped over with a sign saying "swipe please" or something to that effect. And I don't mean dinky shops, either.
What about people that use "knuckle-busters" to make a carbon impression of the card's numbers?
I have a card that has a real number, but doesn't have the embossed numbers on it, so it too wouldn't work in such a machine.
To be fair, it's been years since I've run into one of those machines, so they may no longer be used, or people that use them are just used to rejecting cards they can't impression.
Seems like an easy way to commit fraud. They copy down the numbers and then you walk way with your merchandise/product and then use apple to revoke the card number.
I'm curious to know what the percentage of places are that 1. Support contactless 2. support chip 3. only support swiping.
Secondly, I wonder if they can, for example, have a different number on the swipe, and have that number require extra security (such as approving each transaction on your phone).
Anecdotal - I'm in Canada and pay mostly with credit cards. I don't even recall swiping my card in the past two years. I've basically been doing contactless under $100 whenever I can and chip and pin for all other transactions.
I used to live there 6-7 years ago and even then I used contactless all the time. I've since moved the US (silicon valley no less), and no one had contact-less. Just this year my credit card finally got tap support... So yeah Canada is easily a decade ahead when it comes to this.
- Cashback is generally lower here because interchange fees are regulated/capped to 0.3% for personal credit cards and 0.2% for personal debit cards. Offers of 2% cashback simply won't work outside the US so I'll be curious to see how (if?) they try and expand this globally.
- "All of the spending tracking and other information is stored directly on the device, not Apple’s servers" - can't see how this will work in practice. If you lose your phone, do you lose information on historical purchases? What if you want them for your records? Perhaps "spending tracking" just refers to data derived from the transaction information... but then, couldn't you just recompute it?
- "Apple also says that it’ll use machine learning and Apple Maps to label stores that you use in the app, and use that data to track purchases across categories like “food and drink” or “shopping.” " - I guess this is novel in the United States, but challenger banks like Monzo/Starling have been doing this for a number of years.
- "Customers will also be able to track purchases, check balances, and see when their bill is due right from the app." - not novel, CC providers like Amex and banks like Monzo already do all of this, including push notifications.
- "To get an Apple Card, users will be able to sign up on their iPhone in the Apple Wallet app and get a digital card that they can use anywhere Apple Pay is accepted “within minutes.”" - again, not novel. If you sign up for a Monzo account, the KYC checks are done reasonably quickly (certainly same-day IME) and then your account is open. You can add it to Android Pay (https://monzo.com/blog/2018/11/19/instant-google-pay/) and make payments, bank transfer money in instantly etc.
Overall, I'm a little perplexed as to why this offering is interesting besides Apple having announced it.
> "Apple also says that it’ll use machine learning and Apple Maps to label stores that you use in the app, and use that data to track purchases across categories like “food and drink” or “shopping.” " - I guess this is novel in the United States, but challenger banks like Monzo/Starling have been doing this for a number of years.
I think the novel thing here is that Apple won't actually have any idea who/where you're purchasing from, but will still be able to display data on your phone like they do.
From a UK perspective this card doesn’t make much sense as Monzo or Revolut are probably way better products. For the US there is pretty much zero competitors as banks are stuck in the past.
As for storing transactions on device only, there’s probably an encrypted backup on iCloud.
> Overall, I'm a little perplexed as to why this offering is interesting besides Apple having announced it.
But that’s just it. Scratch another thing off my list of stuff — wireless charger, e-reader, television, car — that I’m waiting for Apple to come along and Get Right.
>- "All of the spending tracking and other information is stored directly on the device, not Apple’s servers" - can't see how this will work in practice. If you lose your phone, do you lose information on historical purchases? What if you want them for your records? Perhaps "spending tracking" just refers to data derived from the transaction information... but then, couldn't you just recompute it?
You can back up your device to your computer (which Apple cannot access) or to iCloud (which Apple can access). If you lose your device, just restore from a backup.
> "Apple also says that it’ll use machine learning and Apple Maps to label stores that you use in the app, and use that data to track purchases across categories like “food and drink” or “shopping.” " - I guess this is novel in the United States, but challenger banks like Monzo/Starling have been doing this for a number of years.
I've got the same services with BNP in France. I don't know how the data is computed/retrieved, though; maybe it's coming from manual tagging by users (since user can tag each individual payement).
> Cashback is generally lower here because interchange fees are regulated/capped to 0.3% for personal credit cards and 0.2% for personal debit cards. Offers of 2% cashback simply won't work outside the US so I'll be curious to see how (if?) they try and expand this globally.
This is also the reason that the bigger banks in Australia dragged their feet on ApplePay, there's little to no margin on those fees that Apple taking more made it untenable for them to support it here, until they did.
Nothing, except that then their card would have 0% acceptance.
Much harder sell to get people to get the card if no merchants accepts it, and harder to get merchants to take it if nobody has one. There's a reason why the credit card market is almost entirely American Express, MasterCard, and Visa.
If they wanted to pay higher cashback than the standard interchange rates allow, they'd be charging merchants more than they're charged for accepting MasterCard or Visa, which means you'll end up with at most spotty acceptance like American Express.
In Germany the acceptance for credit cards only became large scale after the interchange fee was limited. Today, most stores that accept card payments also accept credit cards, but only MasterCard and Visa. Using an AMEX as your primary card would be a pretty bad experience, because you'd constantly need a backup.
With that said, I'm happy most merchants don't put up with the humongous fees—in the end the prices are just raised to compensate for them.
Same in NZ. People who work for more... insular... American companies here are regularly embarrassed by being unable to use their corporate card (because e.g. IBM mandate Amex) most of the places they go.
1% for spend under 10k, 1.25% beyond on the Amex Platinum Cashback Credit Card.
Combine that with the fact that Amex gives targetted cashback offers I can well believe you can end up averaging several percent on a yearly basis if you're taking up some of the higher value ones (I currently have an offer for £100 cashback for £1000+ spend at Trailfinders, that would bump my average cashback up a fair bit!).
I suppose when it comes to opening a line of credit - being able to sign up and have everything approved and ready to go in minutes (at a reasonable interest rate) is the differentiator here.
The products offered by Revolut, Monzo et al are debit accounts, when you open an account with them you're not opening a new line of credit. With a debit account I assume on the whole the level of risk which the bank takes on is significantly less than opening a new line of credit.
As for the features you mention I concur - these are all well established here in the UK.
> - Cashback is generally lower here because interchange fees are regulated/capped to 0.3% for personal credit cards and 0.2% for personal debit cards. Offers of 2% cashback simply won't work outside the US so I'll be curious to see how (if?) they try and expand this globally.
How does that work for US-based cards used outside of the US? I definitely don't lose my rebate while in other countries.
The bank/CC provider most likely just eats it and blocks your card when you are overdoing it. The losses are very likely negligible for the average consumer that is outside of the US maybe once in their life.
It seems to me that Apple can offer reduced fees due to the fact that they'll have less fraud as a result of requiring touch/face ID for every purchase.
While interesting, it doesn't come close to solving what I feel is the largest problem with cards in the US today -- interchange fees.
I know this is a MasterCard, but it'd be more interesting if they were able to take out the $0.35 transaction fee on every transaction. This is the bread and butter of every payment processor, and it's complete rent seeking, AND supposedly all the major processors are going to RAISE it at roughly the same time in the coming months.
Eliminating the set transaction fee could open up so many potential businesses. But I'm not sure what incentive Apple has of getting rid of it. It's a cash cow.
Unfortunately I agree with you regarding the lack of incentives Apple has. IIRC, the money for cash back rewards comes out of the interchange fee. How do you get consumers to adopt a card that's opaquely better for businesses and immediately worse for themselves?
If you are looking for a cartel, look no further than experian, transunion et al. Those firms define your credit worthiness and are hacked at will, spilling out all you credit and PII info.
Why is the per-transaction fee the rent-seeking part?
I get why MC/Visa have a per-transaction fee. I don't understand why there's a percentage of the transaction on top of that. It's not any more work for a $1 transaction versus a $1,000,000 one on their end.
The percentage fee is 1, for rewards necessary to get people to use the card and 2, to cover fraud which is actually a MASSIVE problem and 3, to cover defaults/payment issues.
The per-transaction fee existed to cover the additional cost of building out the network (literally running cables and wires to the merchants' stores) and providing card readers. The network is already built and has been paid for THOUSANDS of times over, and at this point it's largely obsolete. I'm also pretty sure merchants need to buy their own card readers now.
Finally, the best estimates for the cost to process a transaction is < $0.01. So that means, they're charging $0.35 for nothing, essentially.
Mastercard/Visa aren't paying the rewards (that's on the issuing bank), they're not doing much fraud protection (again, largely the issuing bank), and they're not responsible for any of the defaults or payment issues (you guessed it, the issuing bank).
The issuing bank sets interest rates (and late/missed payment fees, and penalty rates, etc.) to cover at least the defaults and payment issues part.
Right, but the issuing bank splits the percentage fee with the payment processor. Again, this brings up the point -- with the issuing bank taking care of all that, what is the payment processor doing that realistically costs the other 50% of that percentage fee?
If you look at Visa's margins -- it's pretty clear the answer is: not much.
A cartel is when a few organizations control something of economic value and act as a single entity in the market. For example, the 1973 oil crisis was caused when OPEC proclaimed an oil embargo. OPEC, controlling the oil market, acted as a group to greatly reduce the supply of oil to the United States (and other ally countries) for political purposes.
EDIT:
In this case, payment processing is controlled by a few organizations. They have agreed to raise their prices at the same time, instead of free market style competition for the lowest price. They can do this because very few companies can do payment processing and it is very hard to become a payment processing company.
For those of us who use credit cards with rewards, the rewards significantly exceed the price increases, because most of the price increases are paid by people using other payment methods.
I'm sure interest revenue plays a role in determining the rewards that are offered, but the data suggest that merchant fees, which are largely paid for by non-credit-card-using households in the form of higher prices, are a bigger contributor. The average credit-card-using household receives a net transfer of over $1,000/year from non-credit-card-using households [0] (2010).
The way I see it, every customers who do not pay their card in full or who don't use credit cards subsidize my travels. It's honestly an extremely good deal for me and even if I pay 2.2% of every transactions, it's more than worth it for me.
I never would be able to pay for as many long haul first class flights if I saved 2.2% of the transactions and used that to buy tickets
The rewards are real -- believe me, I take advantage of them too -- but we're paying for them by the inflation caused on consumer goods by everyone using credit cards.
It's true that you pay the inflation regardless of whether you use a card or not, though. And you only get the reward if you do use a card.
The percentage that merchants pay largely goes to the underlying (card-issuing) bank. They take some risk in chargebacks (not all chargebacks go back to the merchant). Additionally, the banks use the fees they collect to pay for their rewards programs.
>Eliminating the set transaction fee could open up so many potential businesses. But I'm not sure what incentive Apple has of getting rid of it. It's a cash cow.
Indeed, why would Apple want to eliminate that fee?
But also, how is this rent seeking? Rent seeking is defined as attempting to take a larger share of existing wealth without increasing total wealth. Electronic payment systems absolutely add to total wealth.
>It seems to me that Apple can offer reduced fees due to the fact that they'll have less fraud as a result of requiring touch/face ID for every purchase.
I don't think that's a big component of it. It's probably has more to do with Apple users being inherently more credit-worthy. If you're well-heeled enough to be neck deep in the Apple ecosystem in the first place, you're probably less likely to be in credit default.
One of the reasons for having a Credit Card for me is the protection from shady merchants, fraudulent transactions and the assurance of getting my money back if there is a major issue with product/service.
AMEX once refunded me $1800 for speakers that were damaged in shipping with some documentation, photos and details about the issue.
Now, customer service varies from bank to bank but AMEX has always had the best customer service in my view, bar none. I wonder how Apple Card will stack up to it.
I lost my AMEX on a beach in Hawaii (along with my other forms of payment) and they wired me emergency cash to hold me over until the replacement card could arrive. They were nothing but pleasant to me!
I beg to differ on that one. When it comes to shonky hotels, Amex, from my experience, will side with them, given that they know what side their bread is buttered on.
By comparison my Chase/Visa sided with me when I was ripped off by a shady accommodation listing.
I agree totally with the sentiment though, also the 1-2% cash back is great.
Most interesting claim is that there are no late fees. If you don't pay it on time, I presume they're going to stop letting you continue making charges to the card until you do? But that it never gets you locked into the debt cycle of so many other cards?
If true, this is the true real innovation.
Or is there interest, but just no fee for not making your payment on time?
AT least in the video, they do charge you late fee. If you pay balance in full, there's no fee. But if you don't, then the minimum interest they charge is around $20.
So a doubling time of about 5 to 3 years, for those who don't understand compound interest (which is most humans, hence credit cards being insanely profitable).
I guess this means there's no minimum monthly payment?
E.g. generally a credit card will have a minimum of, say, $29/mo., if you have a balance of maybe $500... if you have a balance of $10K the minimum might go up to $129 or something. And if you don't pay the minimum, you're hit with the late fee.
I never really understood the purpose of minimum monthly payment, except maybe it's useful in proving you're not a complete deadbeat, and also probably not dead? Getting rid of it does seem like a consumer-friendly innovation maybe?
In the US at least, banks are strongly encouraged (by law) to have a minimum fee that prevents the borrower from increasing the principal owed through cumulative interest (negative amortization). If the minimum payment might do this, the bank is required to disclose it to the borrower.
Basically it means that borrowers should at least be paying off the interest incurred on the principal owed at the beginning of the billing period.
Charge cards are not what's being described here. If you have an Amex "charge card" (not one of their credit cards) you do have to pay late fees if you miss a payment.
Charge cards generally force you to pay them off each month (again, an Amex charge card expects you to clear out the balance for each cycle). This is a credit card, which means you can carry a balance.
Once debit cards came out charge cards lost a lot of their appeal. Charge cards also tend to have a higher yearly fee (an Amex Platinum is $550 a year) because they aren't making money off of interest (although it should be noted they are making money off of the merchants who accept them).
Not allowing you to carry a balance makes the card less flexible, since it takes away the ability to use the card to finance items you can't afford to pay in full right now.
At least in the US, charge cards also (historically) charged higher fees to retailers, so a lot of stores wouldn't accept them.
So much this. I've never carried a balance on a card that charges interest. but I would be more open to the idea if they charged interest more inline with market loan rates. 15-35% is insane.
35% seems pretty high, but I think you'd find that, far from being insane, the bottom portion of that range is right in line with what's typical for unsecured debt.
You can't really compare it to mortgages or car loans, because those are both secured by a collateral. You can't really compare it to student loans because it's impossible to get out from under a student loan. Either way, the debt is less risky for the lender, so they're willing to offer it for a lower rate.
Never for truly big ticket items, but sometimes the $5 or whatever in interest to carry a small balance for a month isn't worth the extra effort it would take to free up the cash I'd need to pay it off in full without dipping below the minimum balance I like to keep in my checking account, and it's also not worth $5 to me to wait another month before replacing that busted transmission.
It depends on the matter of scale. Some folks either don't understand how things work, or are just bad at math. That's where the problems start for people.
American Express offers both credit cards and charge cards. The "black card" might be the most well known of all cards and its only real limit is AMEX's judgement of your ability to repay the charges.
The same applies to the Platinum Card- it defaults to being a charge card but they offer people a built in credit card as well. The interest rate on it is insane though, so even though I have it as an option I've literally never used it as a credit card.
I am impressed, however this any some of the other products announced are just a pinata for anti trust advocates.
however this product to me is the premier product of the event. finally someone is taking credit card use to the next level in both usability, features, and security. Most important is the level of privacy they are offering.
Now if the three percent discount holds true it will be the defacto means of purchasing from apple.com, similar to how for prime users you pretty much have to use the amazon/chase card for five percent on all purchases.
This sounds like a mediocre credit card (2% back but only with Apple Pay — if you’re okay with cash back on only some transactions, there are much better cards) with some benefit in the form of a nice experience.
I guess that, if Apple’s marketing power can sell a ton of these, there’s considerable upside for them, but it doesn’t sound like a truly impressive innovation.
People who get seriously into optimizing credit card rewards won't go for it. But that's a niche audience. For me, I'm basically indifferent between all credit cards in terms of rewards, but the promise of stronger privacy and not having my transaction history sold is very attractive.
Fidelity Visa is 2% on everything, no cap, no annual fee.
Citi DoubleCash is 2% on everything, dunno if there's a cap, no annual fee. (you have to redeem into a bank account, not as statement credit, to get the full 2%)
USAA Limitless is 2.5% cash back on everything, no cap. (military only, no longer available), no annual fee.
If you have enough cash invested with Merrill Edge ($100,000, including IRAs) the Bank of America Travel Rewards earns 2.625% cash back on everything, not sure of a cap, no annual fee.
If you value Membership Rewards at more than a cent, the American Express Blue Business Plus earns 2 Membership Rewards per dollar spent on everything, $50,000 cap, no annual fee.
Discover IT Miles earns 3% cash back on everything the first year, churnable (you can get a new one every year), no cap, no annual fee.
Alliant Credit Union Cashback Visa earns 3% on everything the first year and 2.5% after that, $60 annual fee (waived the first year), dunno of a cap.
Capital One Venture is (basically) 2% cash back on everything, $95 fee (which they usually waive if you ask),no cap. Only redeemable towards travel. Has a fairly large signup bonus.
Barclaycard Arrival Plus is 2% on everything, $95 annual fee, not sure of the cap. Only redeemable towards travel. Has a fairly large signup bonus.
Paypal Mastercard is 2% on everything, no annual fee, dunno of a cap.
Those are your basic options for no-fuss 2%+ cash back cards. If ApplePay is required to earn 2%, then I'd say the majority of those cards are better; my biggest expenses every month are bills (phone, internet, insurance, oil, electricity, etc) and I don't think I can use ApplePay to pay any of those.
1. Fidelity Visa has international transaction fee.
2. Same for Citi DoubleCache.
3. The rest also have some annoyances (foreign fees, annual fees), so I'd say Apple card is not a bad one for an average CC user who doesn't want to spend too much time optimizing every last penny.
No, the Paypal Mastercard doesn't have foreign transaction fees and earns 2% everywhere with no earning cap. (I just looked up if there is an earning cap)
You have to consider, for Fidelity Visa the foreign transaction fee is 1% and the cashback is 2%. So you can say it has cash back of 1% overseas and 2% domestically; which is a better deal for the vast majority of people than 2% on ApplePay and 1% on non-ApplePay. The only person who comes out ahead with the Apple card is someone whose parents pay all their bills and they spend most of their time on overseas vacations in a country where ApplePay is widely accepted.
But even for that person, PayPal Mastercard is objectively better. USAA Limitless also doesn't charge foreign transaction fees so it is also objectively better. (assuming you already have it - its military only and closed to new signups)
Not only that but the Uber card is pretty much objectively better as well; it earns 2% on ApplePay with no foreign transaction fees or annual fees and earns more than 2% on much more than just Apple (4% at restaurants, 3% on hotels and airfare, 2% on other "online purchases", $50 statement credit on streaming services if you spend more than $5,000/year).
Fidelity also has a sign up bonus sometimes and very frequent targeted spend bonuses (it remains to be seen if Apple can compete in those areas, but they probably will just rely on their branding and loyal fanbase). I've gotten hundreds of dollars in extra cashback from Fidelity's targeted spend bonuses.
There's also no foreign transaction fee on the Bank of America Travel Rewards, though, like I said, it requires a Merrill Lynch account (including Merrill Edge) with $100,000 invested in it to earn the highest rate of 2.625% cash back.
Still no card beats it in Apple spending category, which might be larger than gas /travel or dinning out for many Americans. So it will perfectly work for them. I probably will get it too - buying a new macbook for my daughter, upgrading my spouse's iphone and my apple watch this fall.
"Discover: 1.5 Miles per $1 spent on all purchases." - Yes, but you missed something, they do a cashback match the first year, making it 3% for the first year.
>With Cashback Match, Discover automatically matches all the cash back new cardmembers have earned at the end of their first year on their credit card.1 Discover will apply the match after the first 12 consecutive billing cycles, within the following one or two billing cycles.
At the end of the first year you can apply for a new one and get cashback match again for another year. You can hold two Discover cards at once, so the third year you'd have to close the first card, before applying for a third and at the fourth year close the second, and so-forth (people talk about actually doing this, not worth the hassle for me, and I got the USAA Limitless 2.5% card)
As for a Fidelity account - a Cash Management account has no fees and no minimums and is a useful account to have (offers ATM reimbursements)
I thoroughly believe that late fees and such are taxes on poverty and contribute to inequality, but I feel like without at least a nominal one, people will just pay bills late all the time. I suppose they’ve done research on this but it seems risky.
As someone living in Canada, I see these offers and it sincerely makes me cry. The best no-fee cards here have 0.5% cash back. For anything more than 1%, you need to pay an annual fee of at least $99.
The 2.5% cash back USAA Limitless card is not available for new applicants, but still works for existing holders. It is excellent. No international transaction fees, good exchange rates, works great with Apple Pay. If it ever becomes available for new applicants again, I recommend applying for it. Where else can you get risk-free instant 2.5% ROI? That's comparable to current rates for 1-year Certificates of Deposit.
Yeah, I snagged it when it was available in my state.
It was labeled as an "online-only pilot" and it was rolled out state-by-state, though I'm not sure all 50 were ever all covered. Then they took away some states and then discontinued it completely. Guess it really was just a pilot program. Was available for maybe around a year?
Best part of the card is that you can redeem any amount of cash (no minimum) and you can redeem it right away, even before the statement closes.
Do you know a better card that always gives 2% cash back, no cap?
It doesn't always give 2% cash back, it only gives 2% cash back for places that offer Apple Pay. A significant portion of my CC chargers are at places that don't offer Apple Pay.
Fidelity's card has 2% on everything. They put it into your retirement account but you can give yourself "cash back" with lower contribution depending on your spending.
You don't need to put it in your retirement account, Fidelity offers all sorts of accounts that aren't retirement accounts where you can deposit your cash back, including a normal taxable brokerage account and a checking account.
The Capital One card I have is 2% back on everything in the form of travel rewards. Any purchase that is categorized as travel (taxis/ride share, flights, hotels, touristy purchases) can be instantly redeemed at the 2% rate even if you don't have enough points to erase the entire purchase. Purchases can be erased up 90 days after they happen.
I don't live in a tech hub city but in all my shopping I have never seen anyone use one of the Apple/Samsung payment methods where I live. Even when I spent months in Silicon Valley I can count the number of times I saw it used on one hand.
So I live 1.75 hours from a major city, not in a tech hub of any sorts, pretty typical sleepy Northeast town and use my Apple pay at the local Cumberland Farms, Stop & Shop and about a half dozen less regular shops. Once you start looking for it, you'd be surprised at how many places offer. I've never "seen" anyone else using it, but I'm in the position to "see" only a few minutes each week as I'm waiting in line.
> Once you start looking for it, you'd be surprised at how many places offer. I've never "seen" anyone else using it, but I'm in the position to "see" only a few minutes each week as I'm waiting in line.
Isn't this because Apple Pay is essentially built on top of the Visa/Mastercard/Amex contactless solutions?
Yes, but only "newer" ones. So larger chains you see them, but mom and pops will take a bit longer. Depends on when they got their merchant account/hardware. My point was that it's more common than you think, and it's used outside of tech circles.
Contactless MasterCard was deployed sporadically in the US 15 years ago. Few stores had the readers and few banks issued the cards so it died due to lack of demand. It is questionable that Apple will carry enough influence to better that track record.
Here in the Southeast of the US, the adoption of Apple Pay (and I presume Samsung Pay) has definitely been increasing.
Square/Clover/all the POS's used by coffeeshops and other small businesses have been taking Apple Pay for a few years now. But recently CVS started taking it, and CVS is everywhere (~6,200 stores in the US). Whole Foods is on Apple Pay. I understand Target will be following soon.
It's still not 100% penetration, but it definitely feels like the adoption expands every time a shop upgrades its POS.
You don’t just need technology penetration. You also neeed consistently working devices that inspire confidence to customers that they’ll work.
How often have you done this dance:
1. Notice the POS reader has an icon on it that vaguely indicates it supports some kind of NFC payment.
2. Pull out your phone and wave it around the reader.
3. No response from reader. Do I need to press something on my phone?
4. Still no response. The cashier and other customers in line are looking at you like you are wasting everyone’s time with your high tech crap.
5. Sheepishly put your phone in your pocket, pull out an actual card, and mutter something about “I guess it’s not working today...” to the cashier.
Have this awkward experience enough times and you’ll just abandon NFC payments entirely. Stores should not be allowed to indicate that their systems support NFC if their reader doesn’t work.
Anecdotally, this has never happened to me. I briefly mention I'm paying with Apple Pay almost always and if it's not available/doesn't work, they will let you know.
The retailer also has to press a button to enable the NFC payment type half the time too, it's not available at all stages of the transaction like in other countries.
It is not actually NFC, but if you use Target's App you can put your "Red Card" (target's in-house credit card) into your App and have a single scan for both their coupons system (Cartwheel) and payment at once.
Apple Pay (and Google Pay) penetration in the U.K. is nearly universal.
We have had very good support for contactless payments for a long time, something that Apple/Google Pay will both fall back to if necessary. No one blocks them. Charges are capped in the EU, and low, so retailers are onboard. Add to that the fact that cash usage is declining fast and some places are going card only (London public transport being most notable), it’s everywhere.
Samsung Pay works at most (all?) readers that let you swipe your card. The only tricky ones are gas pumps since they don't read the mag stripe until they detect that a card is physically inserted. With a bit of finesse you can fake this by putting your drivers license or a library card in the gas pump while holding your phone up to the reader.
Barcelona, Spain - all merchants already got used to Apple/Samsung mobile devices payments. Phones, bracelets, watches. I know just few stores where Apple Pay doesn't work.
You might not be aware that the terminal doesn't have to be branded as Samsung/Apple to be usable. Keep an eye out for the "contactless payment" logo[0]; that's generally the indicator you need.
In the UK basically every shop that allows paying with card allows contactless payment and also apple and Android pay. I can't remember the last time I used my actual physical card. It's really commonplace.
We are pretty much at 100% here in the UK. I was in a little village deep in a national park over the weekend (North Wales) and used Apple Pay most of the time.
I would say contactless card payments in general are very popular in the UK, but seeing people use Apple Pay (much less Android Pay) is something of a novelty.
In a lot of places all around the world credit cards always played a minor role. Usually the lack of credit cards in Germany is attributed to being a cash-only country, but I guess it has more to do with wire transfers and direct debit being basically for free. For shopping physically there's also additionally a national direct debit system (called girocard), organized directly by the banks with much lower fees than credit cards.
It's probably a different discussion, but I think the actual problem is that in the US consumer protection seems to be an optional feature of certain payment methods, like credit cards, rather than universal legislation applying to all consumers and sellers. I think consumers should benefit from a reasonable set of protections and rules regardless of which payment method they use to complete a transaction.
Wait. What? I use credit cards for the consumer protections they provide. A store claims to have some type of return policy -- if I buy with credit, and they don't follow that policy -- I get my money back no matter what. With cash, that's not guaranteed.
That is exactly what the parent was saying. They would not consider a financial product that bypasses the major payment processors (Visa/MC) unless it has similar customer protections built in.
I see. I guess it seems fundamental to me that a credit card would have these properties -- even though it's not necessary to actually fulfill the role of a credit card -- which is just to provide credit.
The two seem intertwined, even though they aren't. I just assumed Apple -- if they became a payment processor -- would still provide those protections.
If they didn't, which I see is maybe what the OP was alluding to, why would anyone use the card?
And the post at the head of this thread contemplates the utility of Visa/MC in general. Not really a concern leveled at Apple's thing in specific, and I wouldn't want my concern about consumer protections to be construed as such.
The underlying network that's processing those payments still largely involves Visa, Mastercard, Discover, and Amex. For Apple Pay to entirely replace them, they'd need to convince millions of merchants to get credit card terminals that use them.
Samsung Pay, Android Pay and Apple Pay all are primarily just a different way to use a credit card. They're competing against the physical way cards are processed, not the cards.
Yes, I don't care for running any of these blobs or other DRM garbage on my phone. And what's the selling point ? I don't see the difference between pulling out my card v/s pulling out my phone. Decent security (chip & pin for eg. or other 2nd factor) is perfectly possible with cards. US is just backwards in matters like these. We don't need to beat the security strawman.
Last fall I found myself in a remote part of the country and realized I'd forgotten the check card I planned to use while there.
Fortunately, most retail on the Navajo Nation takes Apple Pay, so I just drove over there every couple of days for supplies and paid with my Apple Watch.
Saved my bacon. But I'd still rather have plastic as a backup considering battery issues in places with extreme weather.
I've never owned a credit card but I've used my debit card directly twice since Christmas because GPay is available everywhere. It's only the ceiling on contactless transactions (£30) that requires me to use it
The cool thing about the latest iteration of PoS terminals is that they enable contactless transactions over £30 if paying by Apple Pay (and possibly GPay too, unsure). I've paid >£30 Tesco shopping sprees using Apple Pay without any issue.
Because at the end of the day, credit cards are loans and more than just transactions. Way more bank related integration work than just charging money.
I want to know what sort of extended warranty insurance they will provide. There was no mention of this in the presentation today. They mentioned giving 3% cash back on anything bought from Apple. Right now American Express is giving me 3% back on all computer purchases and extending AppleCare by 2 additional years. I made the most recent purchase with that card via Apple Pay.
So if I went out and bought a new MacBook Pro today, either AppleCare or American Express will pay to repair or replace it for the next 5 years, until March 25, 2025. (Just for using the card).
This is a HUGE deal for heavily used electronics that tend to fail around the end of the warranty. Amex has paid money back to me for major repairs on the last two MacBook Pros and they paid me the cost of replacing an iPhone 6s when the headphone jack failed.
If it doesn't have a good extended warranty, purchase protection, and so on I can see myself getting it for fun but I wouldn't use it as my daily driver. My Amex has these things and it's one of the primary reasons I use that card.
In 20 years of being a "member", I would say that American Express has had the best customer service of any bank I've ever dealt with. It has been painless even when traveling and when I have had to rent a car I've always just waived the rental insurance too.
I have the credit card but pay it off monthly and only charge what I can afford at the time. As such a member, paying no interest and having received many thousands of dollars in savings has been great. They "win" if you run a balance of course. Ouchie rates.
On a similar note, getting 5% Cash Back each month on my modest AWS bills is certainly a nice perk with my Amex Amazon card, in addition to the 5% cashback on amazon & whole foods purchases.
This is it. I picked "U.S. computer hardware, software, and cloud computing purchases made directly from select providers." As a software development company, this choice represents a meaningful discount on some of our biggest ongoing operating expenses. No brainier.
Just allow me to create as many 'virtual' credit cards from a single card and that's enough. Every single provider that promised that feature has either underwhelmed, or gone out of business.
Yes. I'm so sick of businesses relying on people not cancelling to exist, and thereby making their calcellation process as time consuming and obtuse as possible to reduce consumers chances of cancelling.
Consumers should be able to just NOT pay for a service, and then it's on the service-provider to turn off the customer's access.
I can't tell you the amount of services I've past up on simply because I don't want to (potentially) deal with an awful cancellation process, and then go through the hassle of charging back on my CC. It's just not worth the time -- and they know it and depend on it -- which is frankly disgusting. Invest some time in a better product...
There is a tricky balance to the point you have raised. If the business makes the process too easy, the attrition will increase and the pricing structure will have to go up for the remaining buyers. When that happens, you would come in here to complain that the prices of goods & services are exorbitantly high.
"Invest some time in a better product" is not an appropriate solution since consumers have different incentive processes and those incentives changes throughout their lives. There is a diminishing return on investment for the producer of the g&s and they have to find the right balance.
The process of increasing cancellation cost (e.g. time), inadvertently puts the onus on the consumer to do their due diligence prior to purchasing a product.
No. I personally wouldn't complain that prices are exorbitantly high. If the price should be higher to cover the cost, it should be higher! It should NOT be hidden in an absurdly complex cancellation process. That's my opinion.
Maybe you feel differently. But know that a lot of people feel the other way also.
I use the Amex online chat to block a specific merchant when I want to cancel. Takes less than 60 seconds and they will decline any charge matching that merchant descriptor.
Does their data remain though? If it does then your data would still be in danger of hackers if said business got attacked, etc. Aren't businesses supposed to treat customer data as liabilities now?
Some consumers would want complete removal of their data after deciding not to continue paying for service.
just to reflect your attitude, why should we trust them to delete our data? why do we even tolerate a background level of fraud at all?
how about this - I dont use my cards that often - maybe 20 times a week. i'd be much happier if i got a notification through a side channel with a proposed charge and I could click 'yes' or 'no'.
it makes alot more sense to me than having to poll my account to look for potential fraud and argue with the bank about re-issuing a card with a new number.
wouldn't that be simple? i understand that for some usage patterns that would be inconvenient.
the broader point is that I shouldn't need to expose personal information just to buy a tea towel, I shouldn't even have to give you my email address so you can start sending my helpful hints about how awesome your other products are.
Firstly, MOST businesses don't store any credit card information so it's easier to be PCI compliant if the need arises and in order to limit liability. So if you trust the business enough to put in your CC#, you don't have to worry about the biggest issue.
Secondly, I don't know of ANY company that deletes customer data upon cancellation. I've worked at a few ecom companies now, and the marketing team would just LOL at that idea. Past customers are pretty much your highest converters. No way are you gonna get rid of your data on them.
MAYBE in Europe with GDPR. Even still, no company I've worked at does this even for European customers. I'm skeptical a meaningful percentage of companies do.
The virtual card is also set up in such a way that it can only be used to make purchases through Apple Pay. Which makes it, unlike regular (American) credit cards, a 2-factor authentication system: Something you have (phone) and something you are (fingerprint or face).
That's a big part of why I use Apple Pay when it's available; it gives me a fair bit more protection against credit card fraud.
> When you use your phone to pay in stores with an eligible Visa card in Google Pay, we don’t send your actual credit or debit card number with your payment. Instead, a virtual account number is used to represent your account information – so your account details stay safe.
I think, the parent comment meant that they would like to get a virtual card, so that they can attach it to a service (e.g., create a virtual card for paying your netflix subscription only, and then another card for hulu only, etc.), and then simply remove that virtual card when they want to stop using that service. Especially helpful if the service makes you jump through a ton of hoops to cancel your subscription.
Correct. I use Apple Pay with a web service (Hover, domain registrations) and with an app service (Uber).
In the case of Hover, I have performed a single authorisation, and it is now capable of performing repeat transactions against my card. There is no interface within Apple Pay (that I can find) to remove that authorisation, I have to ask Hover to do that.
In the case of Uber, I perform an authorisation for an expense before I know what the amount is, and I'm not required to re-authorise when tipping.
The Hover example is the problem. Not specific to Hover, but rather specific to the lack of virtual card management within Apple Pay.
Virtual cards by definition do not have to be single use, (un)fortunately.
I used that feature so many times with Paypal and Final and both closed that product after a year or two. I'm not sure what kills it, but it's a difficult space I guess. Maybe too much fraud to handle?
Longer. I used it once around 2006 to pay for an academic conference that the university was reimbursing me for. Looking back, the university making me pay registration during one of the most cash strapped points in my life was crazy.
Did you try Citi cards? I've been using one for years and I think at most I had about 15 virtual account numbers on it (but I do try to keep things tidy generally).
Unfortunately the only approach that I know of with Citi is this Flash-based app, which is increasingly getting painful to use on desktop browsers and seems impossible on mobile. Have you found a more modern approach to using them?
I think you have to give them your bank #. so i'd assume its bad for similar reasons a debit card is bad. but i'd like to hear more from people that used it.
also i doubt you'd get any spending points.. which is kind of a big perk
Not sure what to think of this. Somehow I would prefer if Apple kept building technology platforms that then enable other parties to develop solutions but instead they seem to be moving into a totally integrated platform. The business success is there but from a technology point of view I find Apple has been pretty unexciting over the last years. They have turned into a well run big tech company like Microsoft under Ballmer. Good business but not very exciting.
I think all their announcements are going to be good for developers / their ecosystem. So it's probably positive they are getting some love, and hopefully some increased revenue too
> instead they seem to be moving into a totally integrated platform
Apple has been traveling this path for what, decades now? It can't possibly be a surprise. I suppose we could all wish it to be different, but this is in line with what they've been doing for a long time now.
I think his main talent was to recognize innovation and then having a good instinct for the right timing to get to market. Some people are too early, some too late, but Jobs often seemed to find the right time and also had the courage to pursue something risky.
Cook probably is more like a typical manager who is good at optimizing things. Nothing wrong about that but I wouldn't expect big leaps from Apple under him.
(2017) 'The world’s biggest firm has a financial arm half the size of Goldman Sachs'
'...Apple says that its “value-at-risk” (VAR), a statistical measure of the maximum likely loss in an average day, is $434m. That is huge: similar to the combined VAR of the world’s top ten investment banks. In theory losses on derivatives would be offset by gains in the value of Apple’s underlying business. But the sheer size of these positions gives pause for thought.'
'...Its foreign operation swims in cash while its domestic one drowns in debt. Profits made abroad are kept in foreign subsidiaries. That way Apple does not pay the 35% levy America charges when earnings are repatriated. Some 94% of Apple Capital’s assets are “offshore” and cannot be tapped for ordinary purposes. The domestic business must do the hard work of paying for dividends and buy-backs. Its profits are not big enough to cover these, so it borrows. Domestic net debts have risen to $92bn, or five times domestic gross operating profits. Each year Apple must issue $30bn of bonds (including refinancing), similar to the average of Wall Street’s five largest firms.
Apple’s core business is so profitable that it is—almost—inconceivable that a blow-up at Apple Capital could lead to it needing taxpayer or central-bank support, as was the case for GM and GE. Still, it is easy to imagine how Apple Capital could hurt its parent. A market shock could lead to losses on its portfolios. A two-percentage-point rise in interest rates would result in a loss of $10bn. If bond markets dried up, Apple might struggle to issue so much debt and have to bring home funds, incurring a big tax bill. It might also become tricky to run such a big derivatives portfolio.'
What's your point with this outdated article? Tons of companies have branded credit cards, it does not mean they have the credit risk. That's what Goldman is for in this situation.
> In theory losses on derivatives would be offset by gains in the value of Apple’s underlying business. But the sheer size of these positions gives pause for thought.
What's the point of this article? Apple is so big that its derivatives for protection from FX volatility are so big?
What does the author suggests here; that they stop protecting against FX volatility?
How does something like this work in Europe with no signature on the card? When I tried to use a US card without a PIN that I hadn't yet signed, a German checker made a fuss about the missing signature. This isn't a problem in the US where no one bothers checking the signature.
What about a brewery I went to this weekend where neither swipe or chip was available for their POS and the card number was manually entered?
As they said, it only works where Apple Pay works already. And already Apple Pay works almost everywhere there is contactless terminal.
Some people say you will be able to see the card number in your Wallet app, but somehow I doubt it. There is already a unique card number for every physical card you added to your walled, but you cannot see it. You can verify it on proof of purchase where last 4 digits are shown - they will differ from your physical card.
As for signed/unsigned, it gets vague these days. In the past you were required by your bank agreement to sign your card. If you tried to pay with spouse card the merchant was allowed to call police and destroy the card right away.
Today probably are still required to do all that with physical card, but with contactless payments its usually ignored all the time.
For Apple Pay you must agree to different set of rules, those don't require you to physically sign anything as its fully digital. Same thing here.
> get a digital card that they can use anywhere Apple Pay
Apply Pay users: how broad is Apply Pay adoption? Is this a viable replacement for a VISA, Mastercard or AMEX?
I'm intrigued by the privacy angle to this, seeing as VISA and Mastercard apparently share and/or sell a lot of transaction data with/to third parties.
Edit: The article has been updated: As rumored, Apple is partnering with Goldman Sachs for Apple Card, with Mastercard handling payment processing. The mastercard network, plus the benefits Apples is offering (eg 2pct cashback), could make this really attractive.
Re: Privacy: Cash is the most privacy friendly payment method. Followed by virtual credit cards, which aren't really that private but an improvement over the usual.
Here with Apple Card, even if Apple might not choose to centralise your payment data, the underlying network (MasterCard, in this case) most certainly can know where you spent it, and vendors at point of sale can keep track of it too.
AML laws are a thing. Someone in the chain definitely knows who it was. The payment network for sure, as well as any associated banks, and Apple, clearly. The merchant can see whatever their payment processor chooses to share with them.
With the new Apple Card, somewhere in the presentation Apple had "Goldman Sachs will never sell your data to third parties" but what about the MasterCard backend? Surely, they'll see exact transactions and store information?
They explained this in the keynote. They are generating a per-transaction card number, so there is no reasonable way for Mastercard to track what a certain person is buying.
What they described was card tokenization via the existing EMV standard for contactless payments.
* Tokenization is using a unique per-device credit card. These are generated by the payment network, so Mastercard knows who is making the payment.
* EMV includes per-transaction tokens.
At no point did Apple say anything the prevents MasterCard from tracking your purchases. MasterCard shares this data with the credit networks, and the credit networks sell this data to third parties.
yes, goldman sachs and mastercard will most certainly data mine the information to correlate transactions to each other and to certain people. it won't be perfect, but it's not truly anonymous either.
Thanks for the insight. So, now the question is whether GoldmanSachs can be trusted. Honestly, Apple is the only large company in existence that I can fully trust with my privacy. Given that this whole thing has been orchestrated by Apple, it wouldn't be too surprising for Apple to put preventative measures around GoldmanSachs based on their sleezy history.
I agree with this. Maybe it's because I still have trauma from broken power buttons (back in the iPhone 4 era), but I'd like to not have to press buttons as much as possible.
cash is the most convenient secure and private form of payment. applepay if i run out of cash or its a larger transaction. chip (in the US) is hobbled by stupid UX (insert card, tap random buttons, sign, etc.), so swipe is usually quicker and more reliable. i never use debit.
In Canada I pay for pretty much everything with Apple Pay. It is accepted wherever there is tap available. There is only one coffee shop out of 100+ stores in my town that I can think of that doesn't support Apple Pay
Overall I try and use Apple Pay where I can and find about 2/3 of the time I want to use it I can. My biggest struggles have essentially been at smaller stores that still just have basic square swipers and obviously the occasional cash only locations.
> It should work anywhere that touchless mastercard is accepted, though I do think that vendors can turn off apple pay specifically to avoid the fee.
I don't think merchants have to pay anything extra to accept Apple Pay. It's the banks that have to pay a "marketing fee" to Apple to let their cards work with Apple Pay.
NFC payments are virtually on par with chip card payments in Switzerland, and it seems better every day in the US. I wouldn't say it's a replacement, particularly if you travel to one of many other countries, but Samsung Pay is very universal in my daily life.
I don't use it, but I just read (can't remember where) that adoption in America is about 70% of stores and 99% in Australia. This corresponds to another comment's assessment that it was available in about 2/3 of stores.
In Chicago, a lot of chain stores allow for Apple Pay, such as Aldis and Dunkin Donuts. But it’s hit or miss for independent shops. Some nice coffee shops and restaurants have tablets, but these often aren’t equipped to take Apple Pay.
I'm not going to get an Apple credit card heh. But where did you see this info? They said the number & ccv would be available via the apple wallet app for use online (although you only get 1% back).
This is why it's an 80% solution. Most of my online purchases are at specific places (Amazon, other sites using Paypal, directly through airlines, etc).
However, if Apple can isolate most Apple purchases to using their own card, things get interesting. 3% off Apple purchases is pretty decent. Kind of like Amazon wants all it's data for purchases through it's own card.
I got all excited and then realized that almost none of the new services that were announced will offer me anything as a European.
Apple Card most likely won't be coming to Europe any time soon. The streaming service is also not likely to come to Europe as it includes US-only services such as Hulu and Amazon Prime.
I am aware that this is a bit of a 1st world problem, but all of these services being US-only can be really annoying. Recently I tried to legally stream Battlestar Galatica in Europe. Not available on Netflix or HBO. So I figured I can rent the show from iTunes. Nope, only in the US. How about Amazon Prime? Nope. US only. In the end, I pirated it from one of the private torrent trackers we have here. I was willing to pay and watch it legally. But aside from ordering the blu-ray discs, I had no choice. Wanna keep piracy alive? This is how you do it.
I do understand why these services are not _yet_ available in Europe. It doesn't make it less annoying though.
This entire field is completely messed up. One of my favorite movies this year is from India, I don't usually see Bollywood movies but Manikarnika rocked. It opened in January and now, it's been out on Amazon Prime since Saturday:
This only drives piracy -- it obviously has been ripped and it is available on torrent.
Other side of the coin, I subscribed to Amazon Prime to watch American Gods and it takes more than 24 hours for the latest episode to get to Canada from the USA. It is literally faster to drive across the border, record it and drive back. That's insane. Oh and there's no indication of when it drops. People posted the question for UK and there's simply no answer.
I honestly can say, I tried to move away from piracy -- I have been pirating things since 1985 -- but when I look at https://twitter.com/awealthofcs/status/1110254374192889857 and the availability, I despair and just want to give up. I have the money but having all of these are just annoying. Every service has its own interface and problems. Like, you can't Chromecast Amazon Prime unless you cast the browser tab and that sucks quality wise. And yes, quality! Amazon Prime is not always 1080p but what I torrent is always 1080p and never degrades. Netflix is better quality wise for sure, it was the first I subscribed to watch their Marvel stuff... but I am really not keen on having eventually eight or a dozen different services to search when I just want to watch a movie and deal with the quirks of each.
Piracy is a service problem and these guys are making the service worse and worse every day.
Ps. try searching Roku stick on Amazon.ca , the first result is "Roku® Streaming Stick | Portable, power-packed player with voice remote with TV power and volume | US version – Not intended for use in Canada".
Sports is even worse, wanna watch the game for your favorite sport? Gotta have that one special subscription! That shit thrives on exclusivity deals. (Super Bowl ads, anyone?)
When I lived in the UK I signed up for an out-of-market subscription for NHL, it was something like $50 and I could watch any game from any broadcast (they always do a home and away broadcast) and they’d block out most of the ads because it was out of market and they hadn’t sold the ads there. Now the UK does air some nhl games, particularly during the playoffs, so how’d I do it? Used a vpn in like Peru or somewhere that wouldn’t give two craps about hockey. I paid for it, but still had to jump through hoops to watch it. What I time to be alive.
Whoever figures out the Netflix of sports, wins. I’m calling it.
Australia has (maybe? mostly?) figured this out with a subscription service called Kayo.
It is $15 a month and contains basically every sport my friends who like sports watch.
I'm looking forward to seeing it collapse into a pile of garbage when the governing bodies of various sports catch on and try to "extract value" from streaming.
> I paid for it, but still had to jump through hoops to watch it. What I time to be alive.
When I travel in the EU, several sites refuse to show because of GDPR. My favorite paid porn site doesn't even explain anything just goes to an "under maintenance" page. I can't buy a cinema ticket for the time when I'll be home because the purchase page simply doesn't load. All of this goes away by SSH'ing to my home and using the OpenSSH SOCKS proxy. Or by using a VPN.
Totally true. This is why I got excited for Apple TV+ for a minute. A single interface to access to all of these services is totally worth my money.
I often thought about building something like this, but always came to the conclusion that the potential legal problems are not worth it. justwatch.com is a life saver when it comes to figure out where to get the content from. +1 for justwatch.com!
They already do. Apple TV app happily shows me Netflix, Amazon Prime, Hulu, etc etc content for me to watch. Their suggestions on things to watch also include content only accessible from those services. My Netflix and Hulu (and HBO and others) are even billed to me via iTunes too, so this isn’t a huge shift in reality. Almost everything but the more polished UI (and not needing to wait on the provider’s app to load, looking at you Hulu with your terribly slow app) is available today in fact.
? It's available on Amazon Prime in the US. In Hindi, Tamil 7 Telugu. With English subtitles. Smart TVs these days allow Amazon Prime so why would try Chromecasting from your computer?
Some people (like myself) refuse to trust the typically poor security practices of Smart TV manufacturers and never connect them to the internet.
Or better yet, try to purchase the few remaining non “smart” TVs or have started using computer monitors instead of TVs to get a TV smaller than 40” and without smart TV garbage in it.
I would assume that Apple Card isn’t coming to Europe because Europe doesn’t permit credit cards to charge merchants the insane fees that fund rewards cards in the US.
(I bet that if regulations changes and merchants started passing on fees in a transparent manner to customers, then rewards cards would go away in the US. How exciting would 2% back be if you also paid an extra 2% directly to each merchant for the privilege of using the cash back card?)
Most people miss the point that for a rewards card to pay you. You have to pay off the balance every month. And missing that by even a single month at 10%-21% interest that you get charged. You are more then likely to loose money even with the rewards.
if they're banking on a large percentage being online transactions, then the 1% could be covered or exceeded. Additionally, if they even break even on `transaction fees - cash back` then they make money on interest whenever someone can't/doesn't pay in full every month
Some people are mentioning regulation but for streaming a lot of it comes down to market size. The US is a huge singular market which all speaks one language. In europe there are many smaller markets each with its own language and set of countries and regulations. Even at big-ish US companies that serve europe, there might only be a small team that services just FR or just GB, and almost never any smaller countries.
On the plus side, that gap presents sort of a business opportunity but the downside is, it's not a particularly big one.
somehow Netflix is available in majority of europe with english-only content and it’s fine. sometimes you can get subtitles even. so I don’t think that it is main reason why europe is second-class citizen in this regard.
The language might not be the biggest problem. The insane amount of regulation we have might be. Besides regulation, there are plenty of other differences between countries within the EU.
For example, we don't have a unified banking system in the EU. Each country has its own preferred method of payment. In the Netherlands they have iDeal. In Belgium Bancontact. Dankort in Denmark. The list goes on [1]. Credit cards are not that common in Europe and not everyone has one. To appeal to a wider audience, one must support local payment methods. This is just one example of where things get more complicated compared to doing business in the US.
This is true. The banking infrastructure within the European Union is really good compared to the US.
The example I gave was regarding accepting online payments as a business from inviduals and other businesses. For US busineses, accepting credit cards is usually enough. Large bills can be paid by wire transfer. In the EU, accepting online payments is not that straightforward. Just figuring out the right VAT rate is complicated to begin with.
It is true that there is a lot of diversity in local payment methods, but you can easily cover most of your potential customers by simply offering credit/debit card, bank transfer and paypal options. It's more than enough to get you started.
As for the supposed insane amount of regulation, the majority of international trade is regulated at the EU level so it's quite unified. Not to mention e-commerce which is completely regulated by the EU.
I am not saying that there is not a considerable amount of particularity that may be hindering small startups in fast expansion across Europe but I would find it quite hard to believe that it is much of a factor for the likes of Apple and Amazon.
This is totally true. As I mentioned in my first comment, I do understand the reason.
Doing business in the EU is just a lot harder. Even though a lot of regulation is on an EU level, each country has their own rules and laws on top of that. Just invoicing your customers is a total mess. It's incredibly complicated. Then there is a ton of privacy and data protection regulation (GDPR for example). Germany for example has a dozen or so more rules on top of that. It's one of the reasons why Google Streetview is non-existent in Germany. I haven't even gotten to the the fact that each country has a different language. Although most people of younger generations do speak and understand English just fine.
I totally understand why companies avoid the EU as a result of this. It's a mess. Ironically, I do support a lot of these regulations.
More of a licensing deal thing. Someone has the rights to distribute the show, it's just that it's really not clear who/how/where to get it. That or the price is so inflated that it's really not worth it.
source? because it sounds like that’s an unfounded knee jerk reaction that’s not backed up by fact. there are lots of factors that contribute to fewer enterprises in the EU, and i’m not sure that regulation is anywhere near the top for the majority of cases
but the content won’t likely be the same across regions. netflix for example has a very different library depending on where you are in the world. eg CANADA had about 50% of the US library in 2016 (many other regions sitting with UK/AU around 30-40%)
... but it still costs the same, and that’s not even the part that’s frustrating
Apple owns the rights to apple content. As Netflix does to most of their original content. So their original stuff will most likely launch international. What Europe won't get is all the channels cause those might have different plans for different markets. Disney already talked about an international launch of Hulu and most of the HBO and Showtime stuff is on Sky in some European markets which has TV app integration already.
So no we won't have the exactly same stuff but most of it will end up there one way or another (except Netflix)
When it comes to original content - and that's the main appeal of Apple TV+ - I'm confident that Apple understands that staggered releases aren't really an option these days. Netflix releases their originals at the same time in most markets. I'd expect Apple to do the same.
The access to third-party content (or lack thereof) isn't in Netflix' hands. That's basically the reason why they double down on their very own originals.
I doubt that very much. They've pretty strongly implied that Apple TV+ is just Apple original content, not like Netflix or Amazon where its a mix of Originals and licensed content. If they own the content, they can distribute it wherever they want.
*—though it depends what you mean by 'better'. I don't think anything existing int the EU is as secure and as private as what Apple just announced. For sure the average EU CC is more secure than an average US one and our data protection laws are better. However our credit cards are still allowed to track us and our purchases. Credit agencies still follow us around and rate us. Getting hold of our histories is relatively simple but removing ourselves from those histories is less so.
If you used Apple pay, you can even get less excited. Because since today, Apple is now a competitor for banks.
Perhaps they are too big too fail in America, but I'm pretty sure they are not in Europe and other countries. And those partnerships with banks are probably going to cease to exist.
We all get Prime Video in Europe, but the problem is that much of the content is restricted to customers in the States. Unfortunately, Prime Video in Europe consists mostly of content produced by Amazon, because they have world-wide rights on it.
Thanks for the heads up. I signed up for the 7 day free trial. There are some good shows. I guess I'll keep it for a few months so i can binge watch those shows.
Americans don't realize how good they have it. A few years ago, I made a list of over 100 things that are available/possible in the US but not in Canada. It almost made me feel like Canada was a third world country. I'm sure I could find it.
Here are some examples I can remember:
- Amazon Prime
- Amazon selection and prices
- Amazon Dash
- Amazon groceries
- Amazon third-party selling
- Free shipping in most online stores
- Google Pay, Apple Pay, Samsung Pay (now available in Canada)
- Google Voice
- Google Fi
- T-Mobile unlimited international data
- Credit card churning
- Credit card cashback (up to 6%)
- No taxes on online purchases
- Most prestigious schools in the world
- Netflix content
- MoviePass
- YouTube Red
- Venmo
- Pandora
- Spotify (now available in Canada)
- McDonald's dollar menu, $5 pizza
- Bitcoin exchanges (some options in Canada now)
- Charles Schwab (no international fee)
- Robinhood (zero fee stock trading)
- Cheap Costco booze
- Uber (now available in Canada)
- Airbnb (now available in Canada)
- Planet Fitness ($10, 24-hour gym chain)
- Walmart open 24/7, can camp in parking for free
- You can carry a knife
- Super Bowl ads
- US dollar (most recognized and best exchange rates internationally)
- Dirt cheap chicken and eggs
- Grass fed butter (not strictly US, but impossible to find in Quebec)
- Google Maps satellite resolution and Street view (now available in Canada)
- Best military
- Best Olympic athletes
- Best sport leagues
- Best space program (NASA)
- Most bands tour in USA
- Trader Joe's, Aldi
- You can find American brands (restaurants, foods, cars, clothes, sport teams, movies, electronics) everywhere in the world
- Over 90% of movies and TV shows I've watched are from the US
- Over 50% of the music I listen to is from the US
- Over 90% of podcasts I listen to are from the US
- FAANG, and the quality/compensation of American tech companies
- Most popular guitar brands are American
- Some of the most diverse climate and natural landmarks (Redwoods, Grand Canyon, Yellowstone, Yosemite, beaches, deserts, Alaska, Hawaii)
- The world knows more about US politics than their own country's politics (at least that's my case, e.g., everyone can name the US president)
- Most online communities (HN, Reddit) are US-centric (they assume every user is an American)
Google, Amazon, McDonalds, Walmart, AirBNB, cheap meat & eggs (you know why it's cheap, right?)... all topped off with some hands-down-the-pants fawning over elements of US culture and their 'best military' (do you have a 'top 10 best wars ever' too?).
You are correct that many do not appreciate how good US citizens have it. From an self-interest perspective, all of those things are wonderful, like magical candy, who wouldn't want them.
From a cultural diversity perspective, the spread of american monoculture can become depressing.
From the perspective of trying to reduce climate impact to manageable levels, the amount of services you list which make it extremely easy to forget the majority of externalities in daily decision-making cost can be daunting.
From a political perspective, the success of US narrative-based, media-driven discourse represents a large impediment to actual democracy.
From an economic perspective, it can be depressing to know that these services you list exist in a bubble built on top of terrible social support, an exhausting over-work culture, wealth inequality, disgusting homeless and prison rates, a perpetual war machine, and a debt-based currency.
pizza and beer are way too expensive in Canada though, we agree there.
There was a big emphasis on privacy. Apple does all the categorization and geolocation on device. There was a slide dedicated to the point that Goldman Sachs will never share the data with advertisers.
But no word on MasterCard. Will they share the data, is that their business?
The thing is, even if MasterCard excluded Apple Card from the data they sell, very few merchants send transactions directly to MasterCard. There's usually a merchant acquirer involved, and that acquirer might proxy transactions through Visa rather than integrating with the other networks directly. In that case the merchant, the acquirer, Visa, MasterCard and Goldman Sachs would all see the transaction data.
Plus there are normally other companies involved when a transaction is settled later, like First Data.
It goes
Customer -> Merchant -> payment processor (eg PayPal) -> acquirer (eg First Data in the US) -> Visa or MC -> bank the CC comes from (issuing bank)
If the credit card does not have any numbers on it, how do you make purchases online on sites that don’t directly accept Apple Pay? Does the Wallet app on your iPhone generate virtual card numbers on request that you can use online? Or are you only allowed to use it at websites that explicitly accept Apple Pay? I read through all the official Apple PR stuff and the fine print, don’t see any mention of this.
Another thing to note about having no numbers, I sometimes volunteer to run the box office at a local theater, and we have a little Square reader that only accepts magstrips. But often it doesn’t seem to work properly, so I end up typing the numbers in manually in the Square app. I know it’s not ideal, but when you’ve got 10 people in line you just need to get it moving somehow. How would a store employee deal with a card having no numbers in this situation?
If you're using Square/Stripe they should just be using Apple Pay anyways it's more secure. If the consumer doesn't have or understand that option I'd recommend they pull up the card number in the app. I use an online-only bank and with my phone and laptop in my pockets it'd probably take me about the same amount of time to pull out a credit card as it would to open my bank app with TouchID.
I had a card that won't swipe pretty frequently, after having to have my number typed or to produce a new card for the 3rd time I finally just reported mine broken and a new one was overnighted to me.
I've always thought that its the customers burden to produce a working payment method. If I got skipped in line because my card didn't work I'd have no problems letting someone else go ahead of me while I fumbled around with my phone and wallet.
I think in the streaming it was mentioned "If you need those, they are available on the app". So I assume if you need those details, you open the wallet app on your phone and you can see the numbers, name, etc. and use it as a regular card.
Thank you. I haven’t had a chance to watch the actual stream, but that’s kind of how I assumed it would work. I was just a bit worried given that it’s Apple and they might feel like this is an opportunity to push their Apple Pay API.
(You can generate one, though, if you plan to buy something from a site that does not yet support Apple Card but takes 16-digit credit card information.)
This blog post [1] from 2016 seems prescient, linking Apple's stance on privacy with it's hypothesized desire to become a bank.
It was a good read, hence why it jumped back to mind 3 years later.
Key point:
"Here's my theory: Apple see their long term future as including a global secure payments infrastructure that takes over the role of Visa and Mastercard's networks—and ultimately of spawning a retail banking subsidiary to provide financial services directly, backed by some of their cash stockpile. "
> There will be a physical titanium card, too, but there’s no credit card number, CVV, expiration date, or signature. All of that authorization information is stored directly in the Apple Wallet app.
Does this mean that the card doesn't contain sensitive information in the chip or mag stripe? Will only work if it's near your phone?
If so, this is quite different from status quo, and touches on what the Coin card failed to do.
It's likely just a regular card and the stripe will be clonable. Saying there's "no number" sounds like a gimmick that has nothing to do with real risks.
I like the value proposition; simple and more transparent credit management with increased privacy. This now has to complete with cards that have consumer purchase protection, customer service, and airline benefits.
I think the whole idea of "Cash back" is insane. Someone, i.e. the consumer, is ultimately paying for these rewards, whether it is airline miles or cashback % or whatever.
It is a self-propelling idea that would be almost impossible to kill because doing so would make your credit card offering less competitive.
It is also self-propelling from the consumer end. If you don't take advantage of these rewards, you're paying for everyone else's rewards by buying goods and services at a higher price. Some merchants flat out deny certain credit cards such as AMEX.
Agreed, I don't think it is a coincidence that here in Finland VISA/MC credit cards don't offer cashback and the merchant fees are much lower than US (Nets offers 0.31% for EU consumer VISA/MC debit cards and 0.9% for EU consumer VISA/MC credit cards).
Though I guess lower fraud rate due to chip-and-pin requirement also plays a part.
> It is a self-propelling idea that would be almost impossible to kill because doing so would make your credit card offering less competitive.
Both the EU and China have introduced legislation that caps merchant fees. This helped with cashless adoption, but also killed off many of the bonus points/miles/cashback offerings.
So, you make a bunch of good points. But consider- some people (most people) can't ever get a "cash back" credit card because of their bad credit. How does that play into your framework?
I’ve found in the past Germans aren’t always keen on credit cards - they often push back when you try to use them in shops and restaurants and things like ticket machines at railways only seem to take regional debit cards. Trying to use an American Express gets a very bad reaction. Is that changing?
German here; MasterCard and Visa are accepted almost everywhere even the smallest shop usually offers contactless payments (tap).
Amex on the other hand is a rarity and you should expect that it doesn’t work.
I not sure how different Germany and Denmark is in this regard, but both the MasterCard and VISA branded cards in Denmark is nearly always debit cards, not credit cards.
For reading the comments it seems like people are exited about the Apple Card solving a set of problem I simply don't see most people having here in Denmark.
It’s probably changing, I think, but American Express is also one of the worst credit cards you could try to use in Germany. Mastercard and Visa are much more widely accepted.
If you can even find a merchant that accepts credit cards! While in Berlin, the only place I came across that accepted credit cards was my hotel and a Starbucks. Every lunch and dinner place I went to were cash-only.
Wait so I don't understand. You're saying almost nobody accepts credit cards, and someone else is saying almost everywhere accepts them. My experience is definitely that they don't accept them, outside of international places like airports and hotels.
In the UK everywhere has a payment terminal and that terminal accepts absolutely anything - credit, debit, Apple, AmEx, prepaid, cash-card, whatever. I don't know why Germany picks and chooses.
They could have a single bank in any EU country. For instance, Revolut used to provide cards issued by a British bank to all customers across the EU. It's the beauty of the Single Market.
Probably a temporary CC number generator for internet purchases.
You would not be able to "choose" a vanity number of your own choosing besides being really insecure but also because CC numbers have to fit an algorithmic pattern to be valid: https://en.wikipedia.org/wiki/Luhn_algorithm
Wasn't expecting a vanity number but creating a different number for each service. Something like what capital one has [1]. There would be a number for Netflix and a different number for fios.
Probably not. This is exactly how Apple Pay works - every physical card you add to apple pay is added to your phone/watch/laptop with a different number. If you delete card from your phone and add it again, its has yet another number.
All those unique numbers are handled by your bank and linked to single card account.
Whatever the potential additions for Apple's service revenue, this seems like it will be a highly effective weapon to add to the arsenal for customer retention.
Switching to an Android phone at your next phone upgrade cycle will be a lot harder if it also means you need to switch your credit card. Plus, giving users a better rewards rate for using Apple Pay over the physical credit card will encourage them to build the habit of paying with their actual iPhone (and as a follow on effect, probably help encourage further Apple Pay adoption among merchants).
Smart defensive move as device manufacturers face an ever more saturated market.
As a non US person. Can someone explain the innovation of this? What should be better here? Is there anything I have missed?
As I understand from the Wikileaks cables, the American government prevented Russia to establish their own credit card system. So they can better spy on the people as they have full access to MasterCard and visacards transactions. So how can this be about privacy?
> As I understand from the Wikileaks cables, the American government prevented Russia to establish their own credit card system. So they can better spy on the people as they have full access to MasterCard and visacards transactions.
Hi, do you mind linking me to some sources to this claim?
I'm guessing the 'virtual' aspect of this card will be activated relatively soon - before the physical delivery of the new sleek metal card.
Small businesses are the ones who still get bitten by fees, not just on payment processor level but on the physical machines themselves, the fees are still pretty high with some of the larger players locking companies into longer contracts too. [1] This needs to change.
There seems to be a lot of consolidation playing out too with the likes of WorldPay (who are the largest payment processor here in the UK) getting acquired [2].
When will they confirm every non-US jurisdiction for meeting compliance in FinTech? i.e. is this just another 'in the US market' announcement? Maybe for apple that IS the market. For Google, its been acknowledged that whilst mountain view likes to release in the USA first, and it is the single biggest market they have, its not actually bigger than the others put together: far from it.
Secondly, Most cards run for profit on card processing fees. They are a profit centre to the bank. Is apple running this at a loss for other reasons or is this model of card cash-positive inside 1 year? Because its a long way to the bottom when you have a giant pile of cash, but at some time, in a year based financial reporting regime they will have to account for this thing, and if its not visibly in profit then either they have an opportunity cost/loss or a real world loss.
Commenting on the video of the event in 7 minutes:
1. Apple News was announced again? I think it was already released wasn't it? Still not interested though. No matter how much "AI" they use to make recommendations.
2. Being forced to have an iPhone to have a credit card that seems like any other card sounds like a terrible idea. Plus where I live we already have multiple apps and services that allows me to create an infinite amount of cards and transfer money with zero fees.
3. The single game subscription seems interesting, specially the part where they say they can also be played offline. I wonder how they do that. I don't play games anymore, still, interesting, wouldn't mind trying it.
4. tv.channels looks like other similar services, and they seem to imply you can only use their app on smart TVs and their devices, which is a big no-no. Still, if with good shows and price competitive...
I wonder if the extra cash back for Apple Pay will help spread the adoption of contactless payment. I imagine consumers might shop more at places that take it for the extra cash, and more vendors may start accepting contactless to lure those customers. I guess this depends on how many people end up using the card.
300 of those are Apple getting too much power and stepping into your payment. And Needs to break up Apple or Google or Amazon or whatever. Not sure why it matters as this is not Apple's first CC, they have had Barclaycard Visa with Apple Rewards as told in the 2nd Section Comment.
200 of those are Apple Card not having the best Rebate, as there are many other cards offering much higher rebate with no annual fees. I mean seriously, did anyone expect Apple to offer the best Rebate Card? No one is mentioning You are basically trading around 1% of your Spending discount for your privacy and Data. Along with better Financial Planning from your Data on Devices.
100 of those are about Visa / Master having duopoly and getting all the money. Well there are actually lots of other companies, transaction fees, cost and Interchange fees involves and Fraud Protection.
“Goldman Sachs will never sell your data to third parties for marketing and advertising.”
What if we wanted a more general promise to not sell our data at all? Or to not use it for anything at all except for processing transactions? The loophole is so big one could drive a truck through it
I remember reading an article a few years ago that said Apple has so much money overseas, the most logical thing they can do is to start a bank. Can't find it atm (I'm on mobile). But maybe that has changed after the GOP's tax law changes.
Partnering with a bank to learn the ins and outs could be the first step towards starting a bank. Apple in/famously partnered with Motorola on the ROKR to get a feel of the industry.
"Apple also says that it’ll use machine learning and Apple Maps to label stores that you use in the app, and use that data to track purchases across categories like “food and drink” or “shopping.”"
"Like many of Apple’s products, privacy is a big push here. “Apple doesn’t know what you bought, where you bought it, and how much you paid for it,” said Jennifer Bailey, VP of Apple Pay. All of the spending tracking and other information is stored directly on the device, not Apple’s servers. The company also promises that “Goldman Sachs will never sell your data to third parties for marketing and advertising.”"
Isn't that in the very quote? "All of the spending tracking and other information is stored directly on the device, not Apple’s servers."
Apple Maps 'significant locations' feature and similar are also on-device only - Apple does not know where your home or work is – your phone does, but that data never leaves it.
MasterCard obviously knows what you purchase and where, as they are the ones processing the transaction, but that data transits Apple's servers in encrypted form, which Apple is unable to read by design, I expect.
They were very careful to leave themselves and Mastercard out of that slide. This was not the case for the previous time they mentioned privacy, where they included themselves.
Most of that will be done on device. Data that needs to be synced up across devices will do so on users iCloud account (to which supposedly Apple has no access to).
they don't know what YOU bougth. But be sure they know what YOUR ANONIMIZED AD ID bought.
It's obviously not a good idea to have a credit card from a company thay make up to 20% of their profits from advertising. But somehow because they called it X-pay instead of X-credit card, everyone ignored comon sense. /shrug
I laughed only when I read the last sentence "The company also promises that “Goldman Sachs will never sell your data to third parties for marketing and advertising.” Never trust Goldman when a profit is already built in.
Aren't these recognized as "weasel words" nowadays? We won't sell your data, but maybe we'll sell a summary of your data, or maybe we'll use the data to put you in a category, and sell a list of members of the category, or...
No mention of whether Apple+Goldman Sachs will take over the 0% financing currently handled by BarclayCard for new Apple products. That company’s implementation is antithetical to the values expressed by Apple at this announcement: they retroactively apply interest if you miss a payment or don’t pay off the balance before the promotional period ends; the promo period varies by the amount purchased and the dates only appear on a PDF of the statement; rewards are doled out only after accruing at a certain amount (expressed as points), etc
In the stream they seem to suggest that it’s “private” in the sense of
1. Apple doesn’t get any information (it’s all done on-device)
2. The data GS gets (and probably needs to keep, for auditing/paper trail) they “will never sell.” This probably means they have some kind of special agreement?
As it goes thru mastercard's network, they will get who your card bought from, the [hidden] card number at the time, and the name on the card. Unless Apple has gotten mastercard to not generate any of that data, there's a standard CC hidden in there. There's also a name attached to it. Merchants get bits of this data for fraud prevention. They get it from Mastercard.
What interests me is that they've clearly gone after the dark patterns of their opponents or their blatantly obvious unimplemented features (ie better use of mapping to categories behaviour or clear statements about not abusing the data they gather).
This is a much more compelling sales pitch than "forget about these suspicious practices, everyone does that, but hey isn't this convenient!" which is so common now with the others.
This should be interesting to watch. Most of the big issues are moving online payments over to a 3d secure spec. 3DS is analogous to what the chip and pin did for physical credit cards when upgrading from magnetic strips.
The thing is, it requires the capturing of all of the information Apple claims to not be gathering and then some....in fact, depending on the device you are using it on some of the data capture for 3DS can be downright creepy.
> Most of the big issues are moving online payments over to a 3d secure spec.
Are they? I had to look this up to see that it's referring to the "Verified by Visa" and "MasterCard SecureCode" products. I had to sign up years ago (2007 for Visa, 2011 for Mastecard) for each of these for some online purchase, but can probably count on a single hand the number of times I've used them, and I think at this point it's been years since I've used either.
I'm sure it does. They need to verify that you're qualified for credit.
I don't believe Apple itself would be the party pulling your credit history though. They've partnered with Goldman Sachs as the issuing bank, so it would probably be Goldman that runs your credit.
> Apple doesn’t know what you bought, where you bought it, and how much you paid for it
But surely many intermediaries do know this information and store it forever?
I'm not sure I see the value of Apple not knowing this information, when credit cards are inherently one of the most trackable and most-tracked purchasing mechanisms ever.
I see the value in not allowing another party in on the transaction data. You're correct that there are other parties that by their nature have to have that information (the merchant, the bank issuing the card, and Mastercard). But, it's good to know that the maker of the device doesn't know it as well.
It's bad that the card doesn't have a printed number on it. Many merchant systems require merchants to type in the last 4 printed digits on the card for transactions over a certain amount. Some hotels require it, no matter what the amount. These transactions won't go through with Apple Card.
Does Apple Pay and Google Pay work anywhere I see the tap symbol (looks like a rotated wifi symbol)? Or they must also display the Apple or Google Pay symbol? I've seen places that just have the tap symbol and wondered if I could've used my phone.
Yes Apple pay and Google pay do work with all contactless payment terminals, however your card may not. If the business does not accept Amex for example, using Apple Pay or Google Pay will not work unless you pick a different card.
Generally, yes, at least in the US. There are exceptions; some chains have decided not to support Apple Pay, for example. But the contactless symbol generally means any kind of contactless payment system is accepted, including Apple Pay.
Costco's card is 4% on gas and 3% on restaurants and travel.
Depending on your spending habits, you are probably better off having 1 general purpose card, and then a card or two from the businesses you spend the most money at (target, amazon, walmart, costco etc) or one that fits your spending profile.
The Apple Card might make a good general spending card, but you should still have one that gets you 4-5% somewhere.
Chase Freedom gives you 5% on rotating categories. That combined with the Uber or Amazon card, you're getting pretty high percentages. Apple's 2% is just not competitive, and they don't even give you a signup bonus. It's basically a privacy card.
I hope this is expanded beyond the US. I would get in a heartbeat; if Apple can expand this offering to Europe and other parts of the world with very little use of credit cards they will be able to create new business at a massive scale.
The problem is credit card business in US is a)much more profitable due to significantly higher interchange fees and b)credit cards adoption is much higher.
Would they be able to start offering discounts for those who make purchases with an Apple Card vs other credit card? Would be interesting to see if we are having a “credit card neutrality” discussion here in the not too distant future.
Seems like a subpar card in terms of points. I also find it odd that Apple, a company notoriously averse to discounts and deals, is entering a sector absolutely dominated by nothing but discounts and deals.
Far as I know, this doesn't come with an annual fee. If you only plan to use it with Apple Pay, it's competitive with Citi Double Cash, which is considered one of the top tier cash-back cards you don't pay yearly for. It seems fairly competitive to me.
That's simply not possible, is it? In terms of an all purpose spending card?
I see this as a 1% card with special "categories" that I don't care to keep track of. The world is littered with those. Double Cash is OK, but has international transaction fees last time I checked.
How does one pay the bill to Apple? I never owned a credit card, only debit cards, and they are tied to your bank account. As I understand it, bank transfers pretty much doesn't work in the US and it not really the way you'd want customers to pay of credit card bills anyway.
Denmark has a services that will ensure that your bills are paid automatically, on time, from a bank account you choose. I just never heard that the US having anything similar.
I would assume that you can't pay of you bill with another credit card, seeing as that would be illegal, at least in some countries.
The same way as you pay the bill to any other credit card company: scheduled transfers that pull money from a bank account. (No, this doesn't require any verification on the bank side of things. Yes, this only requires the same routing and account number info printed on every check you write.)
The perks aren't great for someone with good card(s) already. Actually, they aren't great to the marginal consumer (who doesn't have any cards yet) either. Square's Cash App card gives 10% off at Trader Joes/Whole Foods/Kroger plus discounts at a host of fast food places, and can be gotten by anyone, even without a bank account or credit check or anything. The downside is its a debit card, the plus is that the rewards compete with A+++ credit cards.
2% is pretty good for a card with no annual fee. You can get more if you use a card like Chase Freedom and keep track of your spending categories, but I don't know of any no annual fee card with more than 2%. Citi Double Cash is the only other 2% card I know of.
You're assuming those people use that card. In my experience, very few use an AmEx Platinum, etc. for most of their everyday purchases, because that wouldn't make sense. You can easily get more than 2% on every purchase (with 4-5% on a majority for some people) if you can make use of travel rewards.
Am I the only one who thinks Apple may have run out of ideas? Credit card business is messy with fraud, late payments, disputes, customer service issues etc. This will have anything but a positive impact on the Apple brand. Also, Apple will be a junior partner to Goldman who will do the heavy lifting. Why would Apple want to be the junior partner to Goldman Sachs?
God these apple events always tend to get massively cringey. Was it the Goldman Sacks partnership? Perhaps it was the titanium credit card I didn't know I needed... Maybe it was the 30+ minutes devoted to a Netflix clone. Or, maybe it was Oprah... "All connected throoough APPLE!!!!!!!!!!"
I'm not sure. But somewhere along the way, I lost my lunch.
I don’t know about the OP’s reasoning, but for me, it’s much easier to track spending with only a debit card than with a credit card that I periodically pay off from my checking account. A single stream of transactions is much easier to budget than one that cascades into the other.
That makes sense. Some banks offer the ability to track all accounts in one place, but my bank’s implementation is not that good and I haven’t found a good app I can trust to do it.
tbf, they milked that phone gravy train for a good decade. the only new "features" left to talk about these days are the size and location of a "notch".
Very true, they did a good job. Time to go the way of ol' yeller now? I can only imagine the kind of derivatives GS is looking to write on this in the future…
Given the recent revelation that Google was buying everyone's transaction data from MasterCard, I would want to hear them match Goldman's promise not to sell or share your transaction data.
>Of course, Google has been able to track your location using Google Maps for a long time. Since 2014, it has used that information to provide advertisers with information on how often people visit their stores. But store visits aren’t purchases, so, as Google said in a blog post on its new service for marketers, it has partnered with “third parties” that give them access to 70 percent of all credit and debit card purchases.
Goldman is a huge organization, the parts that deal with consumers aren't the parts cutting huge financing deals. Marcus--their online savings bank--is very consumer friendly and pays more interest than almost anyone else (2.25%, certainly more than anyone else with a big name). I'd imagine this offering will be much more like Marcus and have nothing to do with its investment bank activities, but I guess we'll find out.
Marcus is solid. Moved money over there myself. There isn't much to it, no bells and whistles but it's straight interest at a reasonable rate (compared to the others) which many people are looking for. They have CD options as well. Also note this one is FDIC insured and is a true savings account unlike others which often are SIPC insured money market funds. Bonus the site is really nice because it's not a jumbled mess like most bank sites. It's super simple and shows me all I need to know $ and %.
I personally haven't dealt with their support team so I can't speak on how reliable that is compared to the other big banks.
Agreed with jonknee. Don't dismiss it because of the Goldman Sachs name (if anything, I feel more comfortable having a name like this handling financial matters).
You should stop getting your news from Hollywood movies. Goldman Sachs is the very face of American capitalism. They are no more guilty than any other large financial institution of their age in shady practices. The problem you have is with the exploitative nature of the global capitalist system itself, not the specific actor. Just take a look at the history of Deutsche Bank, HSBC, or Credit Suisse if you think Goldman is by any means special in that regard.
of course, but what other options are there? i think the point being made is that all banks large enough to provide an “apple-scale” service are pretty damn awful.
who knows? this could be an apple “toe in the water” play to see if it works, and they eventually replace GS/mastercard. you’d have trouble doing an MVP credit card without these big players to start with.
You’re missing the point. To think that any business would ever act against it’s own self interest within the bounds of this system is naive at best. We’d all love if that weren’t the case, but discussing fantasy worlds does nobody any good.
Rather than a reactionary emotional response to “bad men are bad”, what alternative do you propose to firms like Goldman? I’m not defending them, it’s simply a law of nature that this behavior exists because we allow it to exist. Capitalism is inherently evil, manipulative, and exploitative, yet no one has figured out anything better so far.
So... you're saying this is why we need to regulate bad actors like GS into the ground? Because it's inconceivable they'd ever police themselves because there are no market incentives that actually reward good actors?
Precisely. But we don’t regulate them into the ground because we like money. And Goldman is really really good at making money. Until the good of humanity is held in higher esteem than private profit, this will always be the case. I’m not holding my breath on that one.
I agree, sadly I don't see the US going in this direction until after the voting system and election funding is fixed to the point where no longer is money > public will.
The 2% cashback is especially interesting (in the US, for purchases done with ApplePay). I guess they can get away with a different risk model when they control more of the payment process & security.
all of those have pretty big caveats. Citi seems the closest to straight 2% assuming you pay off your balance all the time, I didn't notice any limits on how you get your 2%. But they do have late payment fees.
PenFed you have to be active duty military to qualify for 2%... Fidelity you have to put your 2% (not going to call it "cash") into a Fidelity product, no balance credits.
I use Citi and there are no limits. I pay my balance in full every month and it's actually better IMO because it incentives payments. PenFed you don't have to be military, you can be a member as well and it's a pretty good bank anyways. Fidelity you can use their checking account, so it's as good as cash.
Apple requires you to use Apply Pay to earn 2%, so it comes with it's own caveats.
Citi has late fees (but yeah, it looks pretty good)
Looks like non-active duty PenFed members get 1.5%
Fidelity Checking account sounds alright, but why not just balance credit?
Until apple pay is much more widely accepted that's a caveat for them. Probably stick around with Capital One 1.5% for now.
That's fair, but with caveats you can also get more than 2% back on every purchase and 4-5% on many purchases. For many people, that's easily worth it and I wouldn't settle for a 2% back card.
- Amazon Prime Visa (5% Amazon, 2% Dining, Grocery, Pharmacy, 1% everything else)
These are just the cards I use right now. There are no annual fees, although some require membership like Costco and Amazon. Pay your balance in full every month and it's a much better option than debit. There's a bunch of different ways to maximize rewards. See /r/churning [1] for more info.
- Amazon Prime Visa (5% Amazon, 2% Dining, Grocery, Pharmacy, 1% everything else)
These are just the cards I use right now. There are no annual fees, although some require membership like Costco and Amazon. Pay your balance in full every month and it's a much better option than debit. There's a bunch of different ways to maximize rewards. See /r/churning [1] for more info.
That American Express one looks nice, though reading about the points feels like a shell game. I think I could use it simply enough just for gas and groceries. The site was really trying to push me towards one of the $95/yr upgrades though.
If you spend roughly $3000 annually on groceries and gas the preferred ($95/yr) card is good. If you're interested in grocery and gas rewards then you may like the Pen Fed Platinum Rewards Visa Signature more.
