And since Apple encourages you to pay less interest, by estimating the interest you’ll wind up paying real time on any payment amount, the theory is that you will be less likely to fall into debts. My thoughts are that Apple will be relying on the merchant fees that will be higher than the Daily Cash rewards to keep Apple Card sustainable but there is more. Apple is able to reduce their costs by saving on three key areas.
New user benefits
Normally companies spend a lot of money on customer acquisition. For example, they offer a discount or additional perks for onboarding new customers. Since Apple already has a big share of the consumer market with iPhone users, they could make savings on user benefits for onboarding new customers by promoting the Apple Card inside the Wallet App.
Apple can also reduce their costs on Customer support. Most support, like how tos, can be done via the help of chatbots and because of the transaction transparency, users can easily identify their purchases instead of having to call a service agent for clarity.
Lower fraud rates
Fraud rates should be way lower because of better security. User sensitive information is not displayed on the physical card and every transaction with Apple Pay uses Touch ID and Face ID to verify the payment.
Besides making money with interest whilst reducing costs, it’s worth noting that the Apple Card will take you deeper into the Apple ‘ecosystem’. You will be less likely to switch phones. The App store and iCloud are already perfect examples of this.