Apple’s new credit card will be a huge commercial success. Offering iPhone users the reward of cash back for using Apple Pay and for buying from the company the aim is to establish the iPhone as the primary payment device and grow revenue.
What is more surprising is Apple’s claim that the card is “designed to help customers lead a healthier financial life.” Supporting this claim is the presentation of colour-coded weekly spend details and the ability to review spend by category. Colour-coding is also helpfully employed to show the consequences of different repayment amounts to encourage customers to pay less interest. It is a recognition that intelligent presentation of purchase information has the potential to positively influence consumer behaviour.
Apple’s new card certainly has some praiseworthy features, but there are some smaller companies being much more creative and ambitious in helping consumers make positive behaviour changes:
The Baltic Sea debit and credit card
Launched a couple of years ago, this is a biodegradable payment card for a cleaner Baltic Sea. The credit card, which is the result of collaboration between Ålandsbanken MasterCard, KPMG and WWF Finland, is linked to the Åland Index which measures the CO2 impact of every transaction. Customers are presented with a digital report on the environmental impact of their purchases – alongside suggestions for balancing their carbon footprint locally or globally.
DO Black card
Doconomy are also introducing a card that tracks the carbon footprint of purchases, but they go a step further by setting a hard limit on a cardholder’s annual footprint. The company see their card as a means for consumers to deliver their personal contribution to 2030 emission cut targets.
Deserve fair credit card
Deserve has a stronger claim than Apple for supporting a “healthier financial life” for cardholders. Targeting students and other consumers without a credit history it applies a proprietary algorithm to assess their financial health and habits from bank account data to predict credit potential. It also supports better financial behaviour. With the Deserve app cardholders can control their spend and build their credit score by applying spending limits, receiving alerts, ‘pausing’ their card and monitoring their credit score.
Next on the cards is beyond cards
With mental health intertwined with financial health there is a societal need for innovation that helps consumers make better financial decisions. The ideal time to engage and empower consumers is when they are facing choices and before they spend. With smartphone screens replacing physical cards and expanding capacity to connect data there is now incredible scope to do this.
Open banking is enabling customers to share and connect data across their cards and accounts. Start-ups like Snoop are already aiming to translate this data into personalised suggestions on switching companies to save money. Imagine if that information was instantly accessible and comparable via Siri or Alexa before making a purchase choice.
Start-ups like Flux offer another insight into future potential. Working with retailers and banks Flux are connecting itemised digital receipt data to mobile banking or credit card apps. Such technology suggests the ability for consumers to see the financial, environmental, dietary or even health consequences of their past and potential purchases is not that far away.
Comparing Apple and Pears
Apple’s credit card offers a modest improvement compared to many conventional credit cards rather than an innovative leap. At this point, however, that does not matter – this is the only card tying consumers into the Apple ‘ecosystem’. The company’s immediate priorities inevitably are driving wide card adoption and generating revenue from the 900 million consumers owning an iPhone.
Bolder innovation and more meaningful consumer benefits should follow. Not only can Apple leverage the potential of a payment device integrated into a smart phone alongside open banking data, but it has no necessity to profit from customers’ additional borrowing or poor financial choices. Arguably, all Apple needs to do is connect their ‘card’, Apple pay, Siri assistant and processing power to the best of a new ecosystem of open apps.
The world’s most popular smart phone should yield the world’s smartest payment experience.