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.
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)