The Apple Payments Ecosystem Explained

"Although Apple has built a one-of-a-kind payments ecosystem, navigating through it can be quite confusing. Let's take a look.

Apple has used payments as a gateway (Apple Pay launched in 2014) to build a FS ecosystem on top of an existing tightly knit network of services.

In doing so, Apple has based its strategy on a single principle that has been taking the entire FS domain by storm: as payments are increasingly coming to dominate every aspect of finance, they take a back seat. And they do so by becoming 1- invisible and 2- frictionless.

And this is exactly what Apple did.

However the seamless integration of products and features into a broader set-up, makes it difficult to understand where the borders are.

Here is a list of the main pillars of the Apple payments' ecosystem:

• Apple Pay: a mobile payment service that enables online, in-app and instore (contactless) payments via iPhones and other Apple devices. It works with any payment method (Apple Cash, Apple Card or other credit and debit cards) that can be added to the Apple Wallet.

• Apple Cash: a digital debit account and card to send, request, and receive money via 1- the Messages app or 2- the Apple Wallet. Also used to get cash back from Apple Card transactions, make purchases, and transfer Apple Cash balance to the bank account.

• Apple Card: A credit card, both in physical and digital format, issued by Goldman Sachs and Mastercard.

• Apple Wallet: a digital wallet that 1- stores passes such as loyalty and rewards cards, coupons, boarding passes, movie and event tickets 2- conveniently organizes credit and debit cards in one place so that payments can be made. Both Apple Cash and Apple Pay are available via the Apple Wallet and integrate into the Messages App.

• Apple Savings: the high yield savings account offered by Apple for users with an Apple Card.

On top of these offerings a number of features add value and depth:

• Apple Pay Later: it is a BNPL feature that allows Apple users to split purchases into 4 interest-free installments spread over six weeks with 0% interest and no fees. Available only in the US, it is currently being replaced by a global solution via partners.

• Daily Cash: it is the cash back Apple users get from purchases using their Apple Card. It is deposited in Apple Cash unless an Apple Savings account is enabled.

• The Apple Card offers 3% daily cash back on Apple purchases and select merchants, 2% on Apple Pay purchases and 1% on all other purchases.

• Apple Tap to Pay: available on iOS 15.4 or later it is a feature that allows merchants to accept Apple Pay and other contactless payments by using their iPhone.

• Apple Tap to Cash: it is a P2P payments future feature (available as part of the iOS 18 update coming in fall) that will allow users to send and receive Apple Cash by simply holding two iPhone devices together."

Author

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