Inside the Apple Card: Mastercard’s ‘digital first, physical optional’ platform

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The Apple Card takes a more aggressively digital approach to credit card relationships than most other products on the market — but the technology behind it isn’t exclusive to Apple.

Following about 18 months of secretive development with Apple and Goldman Sachs, Mastercard is ready to bring the same offering to other issuers. Its platform carries over many of the features that Apple Card users will get, according to Chris Reid, Mastercard’s executive vice president of cyber intelligence and data services for North America. Reid spoke at SourceMedia’s annual Card Forum taking place this week in New Orleans.

“This is digital first. This is, all card details are only available in the digital environment,” Reid said. “Yes it comes with a physical card if you want it — if the consumer wants it — but in that physical card, it’s not going to carry the 16 digit PAN, it’s not going to carry the CVC, it doesn’t need to carry the customer service number or the expiry date.”
To Reid’s knowledge, Mastercard doesn’t have any other issuers signed up for this platform yet. Reid attributed that to the secrecy surrounding the platform’s development under Apple’s strict NDAs. Any bank that wants to launch a card on this platform can do so in six months, he said.

The Apple Card has other features that set it apart, such as the ability to apply for the card within the Apple Wallet app rather than going to a bank branch or website. Mastercard isn’t offering an exact duplicate of Apple’s ecosystem — many banks probably would be happy issuing plastic cards instead of Apple’s titanium — but Reid emphasized the importance of treating this as the foundation of a digital relationship.

The physical card would be as barren of printed information as Apple’s card is, with most of the details accessible through an app, including a dynamic CVC for online purchases.

“We know consumers are looking for something that is digitally oriented, that is enabling them to live their digital lives in a way that they would like to, that carries some spontaneity ... and so that’s why we have introduced this: digital first, physical optional,” he said.

It’s a sentiment echoed by others at Card Forum, where fintechs were discussed as both partners and threats, depending on how well-prepared banks are at responding to them.

For Justin Zeidman, head of credit card products at Navy Federal Credit Union, fintechs are a bellwether.

“It’s interesting how fintechs have a tendency to kind of nip at the edges of your business,” Zeidman said. “You see a lot of fintechs come in, and they’re content to nip at one part of one product or one cohort … It says to us, this is something that we need to defend, or this is a cohort that we need to learn how to serve differently.”

Apple isn’t the only company applying these lessons to credit cards; Barclays beat Apple to market with a similarly digital-first card for Uber riders. That card can be applied for and managed within Uber’s app, rather than requiring the download of a bank app.

Similarly, many banks are using premium materials for their cards, similar to Apple’s choice of titanium. Metal cards, or cards with colored cores, help an issuer’s product stand out within a consumer’s wallet.

And the security elements at the heart of Mastercard’s platform, including tokenization and biometric authentication, are already commonplace in mobile payment applications. These are elements that consumers have come to expect as part of any product that requires strong security.

“This [digital first relationship] is not a either/or — this is in addition to what we all know today, and what consumers all know today, as something that they’re comfortable with,” Reid said.

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