CoreCard: How a small company turned the credit card business around for Apple
Apple will probably move its Apple Card credit card to JPMorgan Chase. The company will probably not be taking a small but important partner with it.
Apple Card with app: Still a specialty in the US card business.
(Image: Apple)
Apple's own credit card, the Apple Card, initially received a lot of praise when it was launched almost six years ago: it is free, offers comparatively high cashback, makes it easy for customers to pay off the total amount, and comes without the additional fees implemented by many other providers, which are often difficult to understand. As it now turns out, some of these user-friendly features do not come from Apple itself: A smaller company specializing in digital payment processing provided the necessary technology. This was reported by the Wall Street Journal in a background article published last Sunday. However, the company called Corecard is now facing a problem: Apple is reportedly planning to move from banking partner Goldman to major bank JPMorgan Chase, which could now take over the company's role as a so-called processor.
More overview and the bill always on the first of the month
Corecard has made it possible to send out credit card statements on the first of every month – something that is virtually unheard of in the US financial sector. A “payment wheel” directly on the bill also shows customers how much they would pay in interest if they do not repay the amount in full. This is all the more important given that Apple also charges high interest rates for its Apple Card, with APRs of up to 28.49%.
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The implementation of the billing cycle on the first of each month alone is said to have been highly complex. Although this is useful for users because they always know when their statement will arrive, it also caused support problems for Apple's banking partner Goldman. The slow customer service even earned Apple and the bank a fine from the US financial regulator.
Euronet Worldwide buys Apple partner
In the end, Corecard is said to have made around 60 percent of its turnover with Goldman – a large proportion of which came from the Apple Card. After it became increasingly clear that Apple was searching for a new partner – Goldman itself has wanted to get out of the uneconomical contract for the bank for several years – Corecard also went downhill on the stock exchange. It was generally assumed that the Atlanta-based company would no longer be working for Apple. Meanwhile, Corecard has also been sold to Euronet Worldwide, a processing company with customers primarily in Europe and Asia that specializes in debit cards. Instead of the 400 million US dollars hoped for by the Corecard founders, the company only paid just under 250 million in shares.
However, it is still unclear when JPMorgan Chase will take over Apple Card. The negotiations are reportedly still not completely dry. Also still up in the air: the internationalization of the Apple Card, which Goldman never succeeded in doing. The credit card, which now has 12 million customers in its home market, is still only available in the United States of America.
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