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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 busines

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.

lotsofpulp 4y ago
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.
- hot_gril 4y ago
  We're talking about branding. Apple is the one selling the card to customers, so it's their brand at stake, not GS's.
  - lotsofpulp 4y ago
    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.
    - hot_gril 4y ago
      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.
  - sithadmin 4y ago
    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.
- varenc 4y ago
  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)
  - lotsofpulp 4y ago
    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.
    - varenc 4y ago
      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.
      - lotsofpulp 4y ago
        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.
  - hot_gril 4y ago
    Apple Pay also reduces fraud, but it costs the user the same in the end. Maybe they're making money this way.
sithadmin 4y ago
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.
- hot_gril 4y ago
  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.

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.

lotsofpulp 4y ago

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.

hot_gril 4y ago
We're talking about branding. Apple is the one selling the card to customers, so it's their brand at stake, not GS's.
- lotsofpulp 4y ago
  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.
  - hot_gril 4y ago
    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.
- sithadmin 4y ago
  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.
varenc 4y ago
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)
- lotsofpulp 4y ago
  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.
  - varenc 4y ago
    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.
    - lotsofpulp 4y ago
      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.
- hot_gril 4y ago
  Apple Pay also reduces fraud, but it costs the user the same in the end. Maybe they're making money this way.

sithadmin 4y ago

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.

hot_gril 4y ago
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.