Apple Card Threat?

#1

Apple is ready to offer its digital credit card with 2% cashback. It seems that this giant has a more solid and loyal customer base than most neo banks. I am wondering how Xinja will respond to this change and whether would consider to revise its strategy regarding customer acquisition?

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#2

Hey @Zass good to meet you and ta for the comment :ninja_emojis_pink_03:. A few things on the Apple card…there are some cool features (integration with wallet and apple pay, ability to see how much you need to pay to pay zero interest etc.) and some that most neobanks offer (categorisation, card locking, digital customer care via the app etc). Cashback has been done many times with credit cards in the past of course - the 1-3% is good, but needs to be seen in the context of paying 13.24%-24.4% if you don’t pay off your credit by the deadline. So I guess our main point is (pardon the pun) comparing Xinja and Apple Card is comparing apples and oranges :_ninja_emojis_lilac_01: in that they are offering a credit card whereas we’re a bank. We’ll be encouraging people to use a debit card and we’ve got no plans to launch a credit card. We are looking at credit products but interested in innovating the whole idea of credit and how you get it and not tying it to a ‘card’. Also, they’ll be focused on apple pay - North America is in some ways a bit behind Australia in that they still have high usage of cheque books and they’ve opted less for the intermediary before the pays - the tap and go! On that level, the horizontal card feels a bit less contemporary and you’ll need to use apple pay not the card to pay tap and go (I think although struggling to find that definitively!). Looks like they’ll launch mid year in US and then not clear when in Oz. Of course, there is a level of cool design with any apple product (and the titanium is very premium/exclusive although that’s not what we’re about at Xinja) however it wouldn’t change our acquisition strategy as regards being a bank and offering much broader financial solutions than a credit card. That said, we are watching the big 4 closely (by which I mean Facebook, Amazon, Apple and Google - NOT the banking big 4 :_ninja_emojis_lilac_01:).

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#3

My friends in payments tell me the margin the merchant bank takes in the US is 2 to 3 percent so they can afford to give a cash back. In Australia there is a much smaller margin of less than 0.5%. Also this is a Goldman Sachs play as much as a Apple play as they are the bank providing the card.

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#4

Very much a GS play, rest assured - don’t forget Buffet is on both sides of this, shares in Apple and hybrids/shares in GS. I doubt their seriousness / bothering with Australia.

Apply Pay has been good here but the uptake rate has been nowhere near that of the US because we’ve had PayWave / NFC / contactless payments here for so long, it wasn’t that much of a great cool new thing, as compared to the US where even as recent as last year when I was there they still wanted me to sign in lots of places…

#5

I would disagree that it wasn’t such a great/cool new thing here as banks simply ignored it and refused to realise how important it is, CBA has had a 400% increase in mobile payments since they launched ApplePay

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