Apple just unveiled its new take on an old innovation, a Goldman Sachs-linked credit card called the Apple Card.
Users can sign up through their iPhone and get access to the card in minutes when it becomes available in the U.S. this summer. The new card hinges on Apple Pay.
For situations where Apple Pay isn’t accepted, the tech firm created a titanium card. It has just your name, etched with lasers, without card numbers and other sensitive information.
The Apple Card pays 2% in cash back on Apple Pay transactions, 3% on direct Apple purchases, and 1% on purchases with the physical card. The rewards will be available on a daily basis.
The card is a step into new territory for both Apple and Goldman Sachs. Apple, which announced new subscriptions for video and news services March 25, is trying to develop new revenue sources beyond its popular hardware products.
For Goldman Sachs, its first credit card continues a push into consumer financial products after spending most of its 150-year history catering to institutional investors, corporations and governments.
The card lets users manage spending and rewards through the iPhone’s Wallet app. It will have no fees of any kind, according to the presentation: no late fees, international fees or annual fees.
Apple will use machine learning and its maps service to list purchase activity in an easy-to-understand way, instead of the cryptic merchant codes that sometimes make credit-card statements hard to understand.
Purchases are grouped in color-coded categories like food, entertainment and more, and spending trends are shown over weeks or months. Payment options are shown dynamically, so users can decide how quickly they want to pay down their debt. Annual interest rates would range from about 13% to 24% if the service were running now, Apple said.
The card uses a special security chip called the secure element to store the Card number, and each transaction generates a one-time code. The iPhone’s facial identification or fingerprint scanner is another layer of security.
“With our hardware, software and services, we think Apple is uniquely positioned to make the most significant change in the credit-card experience in 50 years,” Apple CEO Tim Cook said.
Visa shares dropped slightly on the announcement from Apple.