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What’s Up With This Apple Savings Account?

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

Two silhouette heads with iPhone and piggy bank inside with speech bubbles
My typical credit union conversation.

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

Mobile Payment Cash Exchange Future
The future of payments.

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.

Innovation - Mindshare - Profits: This is the (Apple) Way
This is the way.

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

Old and New Computers - Before and After Apple
Remember boring beige computers?

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

Magnifying Glass on Crystal
Crystal-clear. Because it’s a crys…

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):

  1. 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.
  2. 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.
  3. 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.
  4. A lot of different and related services are mentioned.
    1. 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.
    2. Apple Cash (formerly called Apple Pay Cash) is the virtual account powered by Discover and Green Dot Bank where your Daily Cash (rewards) go.
    3. Wallet is the app, but also the platform, and it requires an iPhone.
  5. “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.

Wallet App - Cards and Keys
There’s an app for that. Wallet.

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

Diverse People and Heart
You know this part.

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?

Apple Reinvents (Improves?) the Credit Card

Update 11/30/23: This was one marriage that couldn’t pull through. Goldman Sachs and Apple may soon be parting ways, but I’m positive the Apple Card will continue. Maybe with Synchrony soon, eventually with AmEx?

Lessons From A (Rumored) Breakup

Not all partnerships work out. And that’s a good lesson here for credit unions, as well as their industry partners. I can speak to that from experience. Each relationship makes us better at ensuring future ones are more-perfect fits.

What’s really interesting, and no one is mentioning, is that this changeover will demonstrate the “Apple way” of transitioning. I can’t imagine it will be just like any other card. They (likely) instigated the split; they’ll have a user plan to transition smoothly.

Does this mean your credit union suddenly has no more digital and mega-corporation competition? No way! In fact, attention is on them even more now because Apple and news links are clickbait heaven. Thus, stories may also feature other fintech options your members can (and likely do) use.

No matter what happens with the titanium card and slick Apple Wallet platform, your credit union should still be looking to emulate its best features and user simplicity goals. I mean, that’s what people, especially your members, want.

Given that an actively-used checking account continues to be the benchmark for “PFI”, that’s probably your best place to focus future work on building revenue, loyalty, and engagement.


Original article below

Today, Apple held their seasonal keynote event, to highlight new services in a range of categories. You may get a kick out of their Apple TV+ lineup. Maybe you’re stoked about reading all your magazines on your iPhone with Apple News+.

But you’re here for Apple Pay improvements. We are talking about the banking world, right?

What is Apple Card?

In the most simple terms, Apple introduced a credit card. They’re calling it Apple Card. (PS – They partnered with Goldman Sachs. Remember talking about that?)

It’s a “mobile-first” card, in that you do most of your spending, tracking, and reward redemptions all within the app.

The entire platform lives within the native Wallet app in your iPhone. No more downloading a banking app just to pay the credit card bill.

Apple Card - Physical
Titanium. Seriously. (And no numbers to get stolen!)

You can track spending by category, merchant, and even view trends. Payments are simplified, with realtime interest calculations based on what you choose to pay. And rewards deposit daily (they’re calling it Daily Cash) into your Apple Cash account (we’ve spoken about this before).

And the physical card is shiny! (It’s made out of titanium!)

Fabulous metal aside, you care about what the card offers. And is it a threat to your institution?

Spoiler: Yes. Probably.

The Apple Strategy

With more than a billion active devices, any time Apple does something, it matters. Few companies have the ability to affect the behaviors of so many so quickly. I’m not even suggesting you try.

What they did with Apple Card is look at all the pain points within the credit card realm:

  • Applying
  • Tracking spending
  • Paying
  • Redeeming (and understanding) rewards
  • Understanding interest costs (and how to minimize)
  • Getting questions answered

Then they added a bit of Apple touch to align the offering with their mission:

  • Privacy
  • Security
  • Beauty (it’s subjective, sure, but the card is so pretty!)

The result is a mobile-first, simplified, and streamlined vision of a credit card.

Here’s how they addressed those pain points:

  • Application: Tap to apply. Done. It automatically issues the digital version, adds it to your Wallet, and that’s it. The physical copy gets mailed.
  • Tracking spending: The app color-codes spending categories, gives merchants their real logos, and uses machine learning (AI) to decrypt those obscure “IC SPEND A-MERCH 14312” charges (it was the Greek food truck, by the way). It will even show it on a map and link to it on Yelp!
  • Paying/Interest: Graphical wheel that you slide your finger around to see your payments change, along with the interest accrued. Financial education with a swipe.
  • Rewards: 3% at Apple, 2% using the digital version, 1% with physical card. Redeems automatically as cash every day (with notation) into your Apple Pay Cash card. Which you can spend at merchants, online, send to friends/family, and more.
  • Privacy: No merchant gets any details about you on any purchase.
  • Security: Every payment uses a one-time code (just like any other ApplePay transaction). Suspicious transactions appear as notifications (and can be approved or denied with a tap). A new card is sent out and no changes needed.
  • Support: Using Business Chat for iMessage, customers can simply text their question to the service. A person answers and helps them out. Through their normal messaging app.
  • Fees: They don’t have them. Any. At all.

Can Your Credit Union Compete?

That’s a great question. On the surface, no. You cannot create such a streamlined system with the tight integration between bank and provider.

However, all is not lost!

I’ve made a point to talk about partnering in many previous posts. It’s just as valuable (if not more so) today!

Your institution is good at the money part. You might also be great in the relationship area.

But, let’s be honest. You’re not awesome with the technology. It’s a constant effort to keep up with evolving expectations as it is, right?

Group of People Casually Talking in Office Space

That’s why you need to partner with companies who specialize in these things. My last post talked about making member communication simple. That’s one of their pain points!

Another post addressed the issues with boring transaction sheets. Am I spending too much on hummus? (The answer to this is, of course, never!)

And the most cynical/sarcastic/actually realistic answer to this question:

Sure, because it only works for members with an iPhone. Look at all those Android users you can still attract!

Mobile First = Simple First

Mobile Banking Phone App and Bank Statue

You’ll hear a lot of talk about how “mobile first” design is essential. That making services for a computer is immediately alienating your target audience. I’m betting the firms which sell you these platforms will be climbing over each other to talk about how their stuff is so mobile first ready.

It’s not wrong. There’s a lot of value to making sure your offering is accessible from where people are.

However, I want to be clear:

Mobile First doesn’t just mean you need to make sure it works on phones.

Mobile First means that your driving strategy is:

How can we make something so simple, so intuitive, so obvious that members can do what they want in a few seconds?

Apple stepped back and saw many of the traditional challenges in credit cards. Then, they built a system (with appropriate partners) to overcome these “yucky spots”.

Edison Bulbs Hanging from Ceiling

It’s about looking at what the real problems are, and how you can address them.

If Edison had only tried to make a brighter candle, he would never have invented the light bulb.

To help illuminate (pun actually not intended, but enjoyed) your best path forward, I encourage you to Subscribe to my blog.

Cover image credit: Apple

Plaid Among Fintechs You’ve Never Heard Of But Changing Banking (2023 Update)

8/24/23 Update: Improved list of fintechs, crossing off one that didn’t make it, and sharing more details about those which have

1/13/21 Update: After months of expectations on a Visa acquisition, that deal has now fallen through. Does it mean Plaid’s business model is worthless? Far from it. Part of why the merger will not occur is over antitrust concerns.

Original article to get background on what Plaid does and why they are so highly desired:

No, I’m not talking about the clothing pattern. Plaid is a Fintech startup which just announced a Series C funding round of $250 million. That gives them a valuation of $2.65B. Yes, billion. Chances are, 25% of your credit union members are using their service without even knowing. And Plaid isn’t alone, either in ubiquity or in valuation.

Powering The New Banking

Plaid powers the backend technologies which connect cool financial apps to your bank (or credit union) account. Little players like Venmo. Which is owned by PayPal (they bought them in 2013). I’m sure these aren’t worth your attention.

It’s not like Plaid does anything which may make your credit union into a “Dumb Bank”, simply a place where your funds sit and nothing else. No, they have no plans to take on other traditional bank services. Like mortgages. Oh, it appears they do. But it’s ok, they want your help.

This appears to be a common theme. PayPal’s new debit card “checking program” links with banks across the country to provide needed services, like deposits, check scanning, and lending. ApplePay partners with Discover and GreenDot Bank, itself a Fintech providing reloadable debit cards.

You’re Still Necessary, But Only For the Boring Bits

Fintechs look to partner with banking institutions because the bank part is hard. There’s lots of regulations, safeguards, and steps you know lots about. Basically, it’s easier to buy space in the safe than to build one yourself. Except they don’t pay you. Your resources get used, your members find great value, and might forget you’re the one holding their money.

“So if Fintechs need us banking institutions, why worry?” It’s a good question. And I’ve answered it before, in reference to lending services. How do you best serve your members? Is it with zero interaction, contact, or even awareness from them that you exist?

Of course not! You’re a part of their lives and they know it.

Well, what if your members never knew who you were? What if you were as recognizable as the brand of tires on your car? (I think I have Dunlop, but I’m not sure, and don’t really care, so long as they do their job) Could you still accomplish your mission?

At Least There Aren’t A Lot Of New Fintechs…

If only. Here’s a short list:

  • Chime – Fee-free debit and secured credit, with over 14.5 million customers, 9 million of which consider them their PFI (and they have the best ads)
  • GoodMoney – Taking a piece of the credit union playbook, they give shares to all users, making them part owners, then use funds to support charitable works. Mission-focused and mobile-centric.
  • Netspend – Prepaid debit products in lieu of using traditional banking
  • Gotransverse – Backend software to allow complex billing solutions for companies
  • Simple – Banking with an app and debit card
  • Koho – Canadian firm with similar product to Simple. Site makes it clear “We are not a bank”, yet with their card, you don’t really need one.
  • PayPal – Besides powering online payments, making business loans, offering the underbanked a checking solution, they can also replace your banking needs. At least they did for this financial sector journalist.
  • Amazon – Business lending, money management, and pretty much anything…they’re Amazon

PS – Simple didn’t make it. Not all startups, especially high-risk fintechs, do. But plenty will.

This list is by no means exhaustive. And, more importantly, the larger firms listed (and many more not included, like big banks and other tech companies) acquire start-ups for millions once they offer a competitive advantage. That’s a competitive advantage over you, to be clear.

What Can Credit Unions Do?

It’s unlikely your team will develop the next billion dollar valuation financial services solution. They’re too busy serving your members and countering the efforts of emerging Fintechs!

For me, the only answer is in partnerships. Some Fintechs seek to replace you. Others, like Kasasa or StrategyCorps (Disclosure: My company represents them) focus on adding value to your services, while keeping your name front and center.

Your members will look to make their financial lives easier. Services like Plaid might be part of that answer. However, to remain relevant, you must deliver clarity on your value proposition to members as well.

Take a look at some of these Fintechs, understand what they are doing and why they are so popular, and then decide how you can adopt these principles to grow into the future!

Image credit: 3D Animation Production Company from Pixabay

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