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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?

Coronavirus: How Your Credit Union Can Make A Difference [Video]

Update 4/3/20: More videos focused on CUs “Living Your Why” of the mission. Edits at end.

I have a lightsaber. Which automatically makes it awesome.

COVID-19! Coronavirus! Pandemic! Bear (and now back to bull) market!

Breathe. In a well-ventilated and cleaned area. Away from everyone else. Now wash your hands.

Whew. You’re exhausted from it all. I get it. We all get it. And yet, staying informed is essential.

For the safety of your staff, their families, and those of your members. What a burden to carry!

No wonder so many companies are implementing work-from-home policies. As someone who’s always lived that way, can I just say, “welcome to the club?”

Ok, there’s nothing I can share which you won’t find literally everywhere else, from your LinkedIn feed to every alert on your phone. Plus, I’m not a doctor. I’m not an expert in any aspect of public health. I just listen to those who are.

Get Latest Info Here

If you want up-to-date info on coronavirus, Ars Technica (my favorite news site) has a daily updated article you can reference at any time. They’re trustworthy and committed to details that matter.

So why am I even writing this post? And, even better question, why are you still reading? Thanks, by the way!

Serving When It’s Most Needed

Because I do know credit unions. At least, strategies to help them run at their best, which includes serving your members and community.

By now, your team has discussed the direct and immediate effects from the pandemic. You’re doing your best to keep the virus out of offices and branches. That’s an important first step. Perhaps you’re even thinking of ways to offer short-term personal loans to members.

It’s about “Living Your Why” of the CU Mission.

Programs to Help Members

Short-term loans are great. I recall during the most recent government shutdown, many credit unions offered 0% loans matching paychecks. Do it again. Or as close to 0% as able. What else? Well, let’s think. Every industry and field will be impacted.

As always, the poor and financially vulnerable will suffer the most. How can you extend a hand to help them today and prevent future challenges (the long-tail effects of the pandemic will be massive)?

Remember, most people live paycheck-to-paycheck. For many, that cycle will get interrupted. Which is bad for them and your loan repayments. This is a great time to bring out that skip-a-payment option. Also, if able, extend grace periods for delinquencies.

What about normal spending practices? Encourage top-of-wallet use by suspending debit card fees during the crisis period (or offer fee forgiveness). Just because you can’t work doesn’t mean your necessities get cheaper. Most people aren’t stockpiling toilet paper.

You may be canceling your in-person events, but that doesn’t mean members can’t still get the same great deals. Look to your car buying service in lieu of car sales. Make some videos to show how members can do most or all of their banking in your awesome app!

Most important, dive into your data. In the same way you identify “most likelies” for buying a car, opening a credit card, or applying for a mortgage, do the same for risk factors. See if you can find members at the highest risk from the economic effects. Then proactively offer your support with specific programs.

Ensure Business Continuity

I should mention, these policies may also extend to your own staff. Most likely, they’ll also miss work at some point. Are you equipped to let them work from home (when they feel well)? Stress test your main systems today to see what the minimum “skeleton crew” is for your institution.

It’s time to skip the events. The league gatherings can wait. Industry conferences are fun, but not when everyone’s terrified of coming within 6 feet of the poor chap allergic to pollen. Besides, you’re all on the email list, anyway.

Innovate in a Crisis

The companies which emerge from this outbreak the strongest will fall into one of a few categories:

  1. “Too big to get hurt” – What they do and offer is so widespread nothing can hurt them for long.
  2. “Government helped us out” – You just know some industries are going to get bailed out by taxpayers; think airlines and cruise ship operators. In the case of credit unions, it might be beneficial, as it could enable you to directly assist more people.
  3. “Necessity is the mother of invention” – When things got tough, you put on the old thinking cap and went to town. I’m sure the results of that brainstorming would be more impressive than anything I could write here.

Your lobbyists will be hard at work on #2. The section we care most about right now is #3. I know it sounds crazy, but my suggestion is to ask your members. Seriously, use your social media, website, and other channels to find out what’s worrying them the most.

I see it as a credit union-wide effort, with a single campaign unifying video posts from staff, members, and a landing page to bring it all together. On that page, share links to trusted sources, feature members and staff, update it daily, and present how you think you can help.

Then, ask them to share their thoughts and fears. From these responses, you’ll have a better picture on how to make a difference than any of us could solely through our Slack channels.

As an aside, I’m not the only one to come up with these exact ideas. PwC advised financial institutions on their coronavirus response. Basically, it’s a prettier version of this post.

We’ll Get Through This. Together.

Ok, not literally together. More like, “together in spirit and mission”. Your goals haven’t changed. And this is actually when credit unions can shine. You exist to provide a better choice for people in their financial lives. Here’s the time to step up.

This is when the leagues, national organizations, individual credit unions, and you, yes, you, must come together. I’m not the smartest person in the room. But I guarantee that you, in some specific way, are. So let your idea be heard!

You can bet the fintechs, Big Tech, and Big Banks are thinking of ways to profit from this outbreak. Maybe their motivations are good. Maybe they’re not. We can’t know. However, what gets attention and succeeds will have effects for years from now.

So grab your hand sanitizer, bales of toilet paper (really?), and start your quest to help your members…and change the world!

Update History

Update 3/31/20: That other video update was fine. This one is better. And in this post! It congratulates credit unions and their staff, as well as poses some challenges to create new opportunities in the future.

Update 3/27/20: I shared a video discussing how a return to normal simply won’t happen, but that you can implement “digital transformation” today to meet the new normal.

Making Change With Your Change

Unless you were in cryogenic storage on your way to Pandora (the moon, not the music service), you’re likely aware of the Apple event held Tuesday (September 9).  Among the wonderful surprises they had for us was Pay (properly written as shown with the Apple logo…Mac users, that’s Option-Shift-K).

Tim Cook explained that their goal was to make the lowly leather wallet a thing of the past.  Pay is their first step in that direction (though I would say the iPhone began the journey, carrying photos, cards, and more, but, stay on topic here, Joe).  Is it as revolutionary as implied?

Yes.

Apple is unique amongst technology companies.  They are rarely first to announce/release anything.  In fact, they are often last.  Music players?  Archos had decent-enough MP3 players long before the iPod.  Phones?  Palm, Microsoft, and RIM (Blackberry) made smartphones for years prior to the iPhone announcement.  Tablets?  You could buy a Windows tablet way back in the 90s.  Was it terrible?  Only if you wanted to use it like in Star Trek.

Waiting is a tough pill to swallow.  You’re watching potential market share pass you by, and shareholders see profits missed in every competitor’s sale.  But, if done strategically, it can make you great. More about waiting in the future.

Google has had a mobile payment system for a few years now, called Google Wallet.  It integrates with Android (and iOS) devices, and on certain phones, can support touch-to-pay at merchants using compatible terminals.  No credit cards to carry or swipe.

Sound familiar?

In principle, Pay is no different than efforts made before.  It imagines a future where we pay for things easily and securely by waving our phone (or wrist) in front of sensors or tapping a button on a website.  Money is transferred.  We get our coffee.  The universe is happy.

What makes their platform unique is scale, trust, and integration.  At launch, over 80% of cardholders will be supported by large banks and Navy Federal.  I’m certain the second line of launches is not far behind.  Where can you use the system?  Well, launching with over 200,000 places ready to go is nice.

Knowing every Whole Foods you enter will accept your phone to pay is reassuring.  Then there’s trust.  I won’t delve into what makes the system so secure, only the most visible: a fingerprint.  To pay, you “sign” by validating your fingerprint.  Can’t fake that one.  Finally, the concept is integrated into places both in the real world and online.

Sites/apps will have a “Buy with Pay” button, eliminating the need to enter your name, address, card number, expiration date, or anything.  Again, verify with a finger, and you’re done.

Does Apple make money from it?  Sure.  Does it make our lives just a bit easier?  Definitely.  I realized yesterday that Apple obsesses over the things we consider minor annoyances. What bothers you is a critical flaw for them.

Frustrated you left the light on in the living room before leaving for a trip? Properly equipped, you can get a notice when your phone detects you’ve left the house, asking you if it should be turned off (or just turn it off automatically).  Did you leave the credit card you wanted to use for shopping at home?  That’s ok, you can just tap it in your phone (or watch).

Integration of our lives digitally is happening.  Claiming each improvement is only a small change with no revolutionary impact is being short-sighted.  Seldom do we realize we’re living a new chapter in the next generation’s history books.  This was another turn of the page (or screen, on the hovering-holo-e-book-reader).  If you’re not already preparing for this and what will evolve from it, you’re falling behind.

Image credit:  Peter Fertig from Pixabay.

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