The Apple card and the Coinbase Card are not just changing the way we look at banks, but the whole concept of money itself
It has now been a few years since banks are been warned of the way FinTechs can regulate the handling of the financial infrastructure. While payment services still needed the ‘real banks’ to be connected to and where third-party service providers, with the recent developments, they can be at the forefront.
Last week saw the launch of the Apple Card and the Coinbase Card. The technology company has introduced a card that gives features as similar to that of a bank debit card. While the digital currency exchange company is taking away the difference between ‘real money’ and ‘digital currency’.
If adopted by the people in large numbers, these cards carry a huge potential to disrupt financial services. Some factors are:
The Apple Card: More than a bank’s credit card
Issued by Goldman Sachs Bank, the Apple Card is actually a virtual card that is built into the Apple Wallet app that can be operated from any Apple device. The new credit card runs on the MasterCard network and can be used in apps, online and even in stores that accept Apple Pay.
According to experts, the tech giant has re-engineered the user experience of a credit card, by just tweaking rewards and pricing and then stuck a digital front end on it. Though the card works only on Apple devices, it can be functional within minutes. For the payment too, there are no fees associated with the card account, no late fees, no over-limit or even international fees. With a lesser interest rate, consumers not just end up paying less, but also, the card app helps them with a better understanding of their spending and saving.
The features that the app and the card providers are not anything new, but the difference is that Apple is integrating the features into its huge product ecosystem and pitching it to its gigantic user base worldwide. With this card, Apple is providing the cash back rewards immediately. While these micro and nano transactions do not lead to a big amount, but experts believe that Apple in effect is actually creating ‘new money’ without any cost the company.
The laser-etched titanium card with the cardholder’s name and the Apple logo has become a status symbol overnight. If this starts being accepted at all the stores worldwide, the bank credit and debit cards will just become a burden in consumers wallets.
Coinbase Card: Makes Crypto money, ‘real’ money
Visa and cryptocurrency exchange Coinbase has created a debit card that is directly tied to the cryptocurrency balance in digital wallets. This card enables the trading of Bitcoin, Ethereum, Ripple’s XRP and Litecoin, all of which can be spent as effortlessly as the money in the bank.
The card first converts the cryptocurrency into British pounds, Euros or USD. “Customers can use their card in millions of locations around the world, making payments through contactless, Chip and PIN,” said Coinbase UK CEO Zeeshan Feroze in a blog post.
This card too comes with a mobile app, which allows consumers to see spending summaries, transaction receipts, and get instant notifications. Experts believe that since Visa has an enormous merchant base and they can scale this card to make it a success with their merchant reach, network, and fraud analytics.
Experts suggest that since the cryptocurrencies that the card is offering to change to fiat money, are based on demand and supply of the virtual money, it cannot bring a real change in economies with stable national currencies. But, in inflationary countries, where the national currency sees a lot of highs and lows, this concept can prove to be a real success as it is a great alternative.
Some experts also suggest that this card can create a curiosity among people to sign up for these wallets and make people more interested in cryptocurrency that can, in turn, drive acceptance and adoption.
While the two cards seem to be promising and with the security of MasterCard and visa networks, these cards can change the way financials take place. New promising concepts can also die if the regulations do not favor them. How good are these developments and how far will they go, in actually disrupting the banking and financial services, are what will be interesting to know?