Update 8/2/23: $10B in deposits. That’s it. That’s the update. Look to your mission for ways to make your credit union appealing. Because Gen Y (and Millennials, and Gen X) is fine with their iPhone doing it all.
Update 4/20/23: It’s officially here. And with a 4.15% APY, their savings has got yours rate-beat. And integration beat. And “get it on the device you already use” beat. Yet those aren’t even the important points. So let’s talk the why and how your credit union can “think different”.
This started as a LinkedIn post. However, as I kept adding explanations, it became obvious…this is an article. As an industry, credit unions need to understand what is and isn’t going on with Apple’s savings account. And what that means for all of us.
I Speak Apple
If you’ve spent any time here, follow my Twitter handle, or spoken to me, you’ll know I’m really into Apple. If you have a question about a product, historical factoid, version release schedule, or even specs, I can tell you straight from memory. (There’s even a security fix credited to me!)
Why do I share that? Because I want you to realize that I’m possibly the most qualified person in our industry to talk about the “doings of Apple”. I’ve connected Apple to credit union insights in 49 separate articles (making this one the big 5-0!).
In 2019 I claimed that Apple reinvented (improved) the credit card. Back in 2017, I started the conversation on Apple Pay Cash (now Apple Cash), their first foray into a “savings account”, and warned that they became the face of your institution for members.
Last year when Apple Music added both Lossless and Dolby Atmos to their service, I asked credit unions if they were delivering hi-res value to members. Just having music, I mean, checking accounts, was no longer enough.
When others start talking about Apple’s banking intentions, I listen. And now we’re here to clear up any misconceptions, while also highlighting the enormous challenges (and opportunities) this adds for your institution.
ApplePay & Your Credit Union
Suffice it to say, Apple is big enough that when they do something, or even just hint at it, industries react. ApplePay was introduced in 2014. By January of 2015, I was warning that it was the new standard.
If someone had a good experience with that service, they would prefer to not go backwards in technology and convenience. (“Luckily” for credit unions, it wasn’t always a good experience yet because of point-of-sale incompatibility and untrained staff. Not anymore.)
At the time, I was impressed by how fast many credit unions stepped up and made their cards ApplePay compatible. In some ways, it was laying the groundwork for handing your member’s PFI over to someone else (that’s just a nod to the cleverness of Apple’s slow, deliberate, and integrated approach to things), but, ah well.
Despite these risks, ensuring your cards can be added to mobile wallets is necessary.
The Apple Savings Account (it’s just Savings) has both nothing and everything to do with this history.
Savings. By Apple.
A recent article in CUToday implores credit union executives to “pay attention” to Apple’s banking intentions. It has many great points about the merging of savings and checking accounts, the ease of digital account opening, instantaneous access to rewards, and more.
“[I]t’s the full spectrum,” Richard Crone explains. He’s right. Apple strategically creates products and services which start out as separate initiatives, but then slowly (and sometimes unnoticed) merge together. Before you know it, they just took over an industry.
Apple plays the long game, and their end-goal isn’t market domination. It’s mindshare. With a huge profit margin no one else can match. While other companies sell far more phones, Apple rakes in over 90% of the profits for the entire industry. Can you name 5 other smartphones?
You can bet this is their approach to banking, too.
The Pre and Post Apple Effect
Apple also redefines traditional categories. There were computers, but then came the Macintosh. There were music players, but then arrived the iPod. We had plenty of smartphones, but we didn’t have an iPhone.
AirPods revolutionized what we thought headphones could be. The Apple Watch made a smartwatch practical, fun, and a crucial tool in monitoring and improving your health.
Now take a step back: All of these products complement each other, with subscription services to overlay. AirPods auto-switch between every Apple device you own. iCloud+ (starting at $0.99/month) links data from Apple TV (have you tried AppleTV+?) to your Mac, while adding privacy protection and more.
Apple Wallet is their “life” hub. It’s a banking app, but it’s also a platform, where you can access cards from other institutions, including your credit union, plus employee badges, mass transit passes, Disney World Magic Bands, even your car keys and ID.
And you just noticed that Apple is slowly replacing your physical wallet. No way you’ll go anywhere without your iDevices now!
Plus, did you know that your iPhone can be a merchant payment terminal? Yep, with Tap to Pay on iPhone, you can accept purchases by letting people tap their card, watch, or phone to yours.
Does that work with your business services? It does with Square. And I’ll give you one guess which app manages all that…yes, it’s Wallet. The same place you can deposit those funds into Savings, or pay for something yourself with the Apple Card.
Quietly, Apple has walked into the payment, savings, and budgeting space, from both the consumer and merchant perspectives. Innovation, mindshare, profit.
Apple & Your Credit Union: Bringing Clarity
There are a lot of similar-sounding services, platforms, and even physical cards. So let’s clear up any misconceptions (including in that above-linked article):
- When this article was originally written, it had yet to launch. Now, as of 4/17/23, it’s available to sign up (in less than a minute). Compare that to adding new accounts for members at your institution.
- Apple’s savings account will be limited (initially) to users of the Apple Card, which is credit. Can’t qualify for the credit card? You don’t get a savings account. This will likely evolve over time, but for now, they want the tie-in, which makes sense.
- To be clear, Apple isn’t a bank. These accounts and services are through a partnership with Goldman Sachs. This should remind you of a past article. There’s more, but that’s for the next section.
- A lot of different and related services are mentioned.
- ApplePay is the platform that lets you digitize debit and credit cards (like the ones at your #creditunion) and use them from your iPhone, iPad, Mac, or Watch.
- Apple Cash (formerly called Apple Pay Cash) is the virtual account powered by Discover and Green Dot Bank where your Daily Cash (rewards) go.
- Wallet is the app, but also the platform, and it requires an iPhone.
- “Supporting” Apple Wallet at your credit union should already be done and just lets members pay with your cards through their iDevices. This has absolutely nothing to do with their savings account or the Apple Card. Consider this your lifeline to digital audiences, nothing more.
Even more simplified:
- Apple Savings. A huge threat to your debit usage.
- Apple Card. A credit card that makes yours look old.
Digital, Sure. Also, App-Based.
All of this, of course, works through a single app, Wallet. As Crone explained, “the enrollment happens online”. In fact, everything happens digitally, on a single screen. When credit unions talk about simplifying applications or streamlining account openings, it has to be this easy.
You can’t do it alone. And that’s ok. I’ve discussed how to address this before. My company even has some ideas.
To Succeed: Be A Credit Union
Bottom line: You can’t beat Apple at their own game.
But that’s ok, because offering credit cards and checking/savings accounts has never just been what your credit union is about…right?
Compete by living your mission.
Earn loyalty by standing up for members.
Keep it simple by offering the best available digital services.
Market the difference, not the similarities.
Apple and other companies will continue to innovate simplicity and creep into more industries. The path for survival, and potentially even great success, is in knowing your why. Remember, Apple doesn’t need to be the first, nor the largest. They just want to be the best for their customers.
And isn’t that a pretty credit union-esque thing to be?
