They already cheapened their brand beyond this when they created a credit card. CC is another form of BNPL, but more importantly, it's the most gimmicky business out there.
They did not create a credit card. Goldman Sachs (GS) does all the financial work, and gives Apple a cut for the branding.
Same thing here. GS is doing the underwriting, Apple is just providing the tech to be able to access the customer at the point of sale and make a split second automated offer for GS to lend money.
Edit: I was wrong about GS doing the underwriting. The website states:
>Apple Pay Later is offered by Apple Financing LLC, a subsidiary of Apple Inc., which is responsible for credit assessment and lending. Apple Financing plans to report Apple Pay Later loans to U.S. credit bureaus starting this fall,5 so they are reflected in users’ overall financial profiles and can help promote responsible lending for both the lender and the borrower.
My take is that the real business opportunity for Apple here is fraud reduction, not just the Apple branding.
The biggest cost to any credit card provider is fraud, which they have to cover. Credit card fraud is $100B+/year. The Apple Card requires an iPhone and by leveraging iOS they can cut down on fraud. This lets them negotiate a better cut of the revenue from Goldman Sachs.
I suspect the iPhone integration even cuts down on fraud when you use the physical Apple Card directly. Leveraging location and activity data from your paired iPhone/Apple ID probably gives them many useful signals for fraud prevention. And you'll notice that Apple seems to have extra logic for detecting jailbroken iPhones when you try to sign up for the Apple Card or add it to your wallet. (App Store and various other Apple services still work, but not the wallet/Apple Card related features when jailbroken)
See my other comment, but I just read that when you use Apple Card + Apple Pay together they give you 2% cash back. To me this really seems like more evidence that the fraud prevention of Apple Card + Apple Pay works well enough they can make this offering.
Maybe, but I think if that were really the case, they would have at least offered 2% cash back on all purchases to be competitive with other credit cards. That is the baseline free credit card that anyone credit card worthy can get.
Apple Card does offer 2% cash back on all purchases! But only when you pay use an Apple Card via Apple Pay, not when you pay with the physical card. I suspect this is because when Apple Pay is used they have particularly good fraud prevention allowing them to offer this in that case.
Lots of other cards give 2% cash back without Apple Pay and Apple’s advantages in fraud prevention, so I would expect Apple to be able to offer even more cash back if they wanted to attract other credit card users.
Branded financing options have nothing to do with brand prestige. Luxury car brands do it. High fashion houses do it. High street department stores have been doing it longer than either of us have been alive. It doesn't turn anyone off to a brand.
Basically every single retail business brands a credit card. What difference would it make? Every airline, hotel, and retail store offers their own branded cc. Even Costco does, and that is about as high of brand reputation as you can get.
Yes, exactly. Those aren't seen as tech companies. Apple has cheapened their brand to that of an airline or hotel, or Costco at best. It's not terrible, but it's not the visionary company it used to be.
This is nothing new. Apple's been in the BNPL finance game since the original iMac was introduced - so if they're tarnishing the brand, they've been doing it since they completely rebooted the brand.
In 1998, you could finance a G3 iMac with a loan for ~70 months of $29 payments. They also started up a store-only credit card finance option sometime in the early aughts via Barclays.
I'm aware that they've always offered financing, as many do, but it wasn't branded as a product like the Apple Card is. The product was the iMac. This time, the product is the card itself, complete with a brand name and heavy advertising. They're likening themselves to Citibank or Walmart.
