The Strategist

No cryptocurrencies allowed: What to expect from Apple Card

08/07/2019 - 12:03

Apple has scheduled the release of the Apple Card credit card for this August. The some of the company’s requirements to the card’s future owners are quite specific are quite specific: for example, it is prohibited to jailbreak the device and purchase cryptocurrencies.

The Apple Card was first introduced in March 2019 at the presentation of the company's new services. One of its advantages was the ability to pay for smartphones without plastic cards, a cashback of 2% and free service.

At the same time, the company promised that all transactions will be carefully encrypted, so that Apple will not be aware of how much you spend money and what exactly you buy; the company also committed to protect this data from third parties.

Apple CEO Tim Cook hinted that the Apple Card was in its final testing phase and would be released in August 2019. Meanwhile, the Goldman Sachs Group, Apple’s partner, has published a user agreement that sets out requirements for the card’s future owners. Some of these demands raised questions.

First of all, the future holder of the virtual card is forbidden to remove manufacturer or carrier restrictions from the device, better known as jailbreaking. In fact, this is an operation to access the file system of an Apple device. Jailbreaking is completely legal, but not officially endorsed by Apple.

The Apple Card user agreement states that using a jailbroken iPhone with an Apple Card is a violation that may lead to suspension or complete disconnection of the account.

Another rule, which cannot be called typical, prohibits the owner of an Apple Card from buying cash equivalents, which include cryptocurrencies, online casinos chips, racetrack bets, as well as lottery tickets. Apple itself has not commented on these requirements.

It is known that Goldman Sachs is not the only company that has banned purchase of cryptocurrencies with credit cards. Earlier, large organizations such as Lloyds Banking Group, Virgin Money, JP Morgan Chase and Citigroup have introduced the same measures. Banks fear that volatile cryptocurrency prices may make their customers into debts.

Apparently, Apple, which is about to enter the financial market, also distrusts cryptocurrencies, unlike Mark Zuckerberg, who in June 2019 announced his own cryptocurrency called Libra.

Among the initial consortium members who will manage Libra centrally are Visa, Mastercard, PayPal, eBay, Lyft, Spotify AB, Uber Technologies, Vodafone and many others. Nevertheless, this project was greeted with skepticism by industry experts, as at the moment the social network was in a crisis of confidence, which could affect success of the whole initiative.

The American authorities also disliked Zuckerberg’s idea. The U.S. House Committee on Financial Services demanded that Facebook suspend development of its Libra cryptocurrency until lawmakers have more time to investigate all the threats.

“It is imperative that Facebook and its partners immediately terminate implementation plans until regulators and Congress have the opportunity to study these issues and take action,” the committee said in a letter.

Claims to Apple and its ambitions to enter the new market are yet to be commented by the American authorities. For the company itself, new markets may be the only way to maintain its leading position in the list of the most expensive technical companies. According to the last statements, Apple's total revenue was $ 53.8 billion, an increase of 1% compared to last year. At the same time, the company's profit decreased by 13%.