Apple Card + would compete with AmEx Platinum and Chase Sapphire Reserve

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This week: Imagine a high-end Apple credit card, a potential Square rival, and your questions answered about Touch ID on the Apple Watch, the future of the iPad mini, and a new jumbo iMac.

Starters

The beginnings of the new American Express Platinum card reminded me a lot of the Apple Card, the collaboration of Goldman Sachs Group Inc. that came out almost two years ago. So far, it doesn’t look like the card has made much headway – it’s still only in the US, the rewards are poor, and the revenue impact for Apple Inc. doesn’t seem significant.

Apple shouldn’t give up. I think what the product needs is an Apple Card +: a product to target the high-end market dominated by Platinum and Chase Sapphire Reserve. These cards charge anywhere from $ 550 to $ 695 per year, prices that are not out of reach for the types of Apple consumers who regularly fall for Pro models or Hermès watch straps.

A card that combines the sleek software of the current Apple Card and the monthly installment plans on Apple products with better rewards and benefits could be unbeatable. This could provide a solid new revenue stream for the company, drive adoption of more Apple services, and create new competition in a market that needs to be turned upside down.

While the AmEx and Chase cards both target the same consumers, they take slightly different approaches: AmEx has a poor, travel-focused rewards structure (five points per dollar spent on flights, one point on everything else. ) with a solid set of credits for Equinoxe, Streaming, and Travel. Chase’s credits are lower than my personal habits, but the Sapphire Reserve has a better rewards structure (three points on catering and a much broader definition of travel).

Apple could charge an even higher annual fee, say $ 750, justified by the kind of perks a premium cardholder expects, but of course with a focus on Apple. Here is an example :

• $ 10 per month in credit to Apple services like Apple Music, Apple TV +, or Apple Arcade. It would be similar to AmEx’s digital entertainment credit. (Up to an annual value of $ 120)
• An annual AppleCare + subscription for the cardholder’s iPhone. It would be a more premium version of the phone insurance offered by many credit cards. (Up to an annual value of $ 200)
• $ 200 in annual statement credits for travel related purchases (annual value of $ 200)
• $ 10 in monthly credits to ridesharing services like Lyft or Uber, matching offers from Chase and AmEx ($ 120 annually).
• Access to airline lounges: Of course, like competing cards, Apple will have to offer lounge access. Perhaps United Airlines, for which Apple spent $ 150 million a year on employee travel, would be interested.
• iMessage Concierge: Another key feature of the AmEx Platinum is its concierge system, where guests can call for dinner and travel reservations, among other things. With its vast AppleCare network, Apple could also compete on this side of the map.

When it comes to the rewards, Apple is expected to revamp them as well. 2% cash back on all purchases through Apple Pay is fair, but the 3% return on Apple purchases is lower than other “store cards” (Best Buy and Uber credit cards offer 5% rewards on purchases made through them). The Apple Card also lacks multipliers for popular categories like grocery, gas, restaurants, and travel. I would suggest that Apple go up to 5% cash back on Apple purchases and 3% on the aforementioned categories.

Now is the prime time in the travel card market. With high vaccination rates among the well-to-do, there is a pent-up demand to book travel and get around. American Express and JPMorgan Chase & Co. recognize this and are competing aggressively with each other by overhauling benefits and extending sky-high signup bonuses. If Apple offered a competitive premium card to attract the most loyal customers, it could wreak havoc on the credit card industry.

The bench

Apple’s plan to compete with Square appears to be moving forward. Last July, Apple acquired Canadian company Mobeewave for $ 100 million. The company has developed technology for phones to accept payment by tapping a credit card or other phone against its back. This would appear to be the perfect feature for Apple to add to iPhone and Apple Pay, rivaling Square Inc. in the small business payments ecosystem. A year after the deal, however, Apple has yet to make any such announcement.

But it looks like Apple is now taking a few steps forward. MacRumors noticed that Apple eventually took control of Mobeewave’s domain name, a common practice when integrating a business. More interesting to me, however, is a recent job posting in Montreal (where Mobeewave was based) within Apple’s wireless technology ecosystem team for an engineer with experience in engineering. “Payment protocols” and “mobile payments”. It certainly looks like Apple’s plans for Mobeewave are moving forward.