Apple Card is not a feature or a product that can be launched simultaneously worldwide.

It is Apple’s bid to plug into the existing credit card ecosystem. In existence for nearly 50 years, this ecosystem is run by banks who issue credit cards to customers (“issuers”) and empower merchants to accept credit card payments (“acquirers”) and orchestrated by credit card networks like Visa and MasterCard. The credit card value chain runs on certain best practices across the lifecycle of a credit card spanning decisioning, issuance, onboarding / unboxing, activation, ongoing usage, statementing, collections, recovery, and so on. Many of these best practices are arguably designed to favor banks than customers (or merchants). Ergo credit cards have many fees, allegedly hidden charges, long lead times for issuance, friction for activation, stringent qualification criteria by FICO credit scores for issuance, dodgy recovery practices, chargebacks, and not-so-great CX overall. Nevertheless, the credit card ecosystem has stood the test of time: It’s popular with customers, (at least) tolerated by merchants and enormously profitable for banks.

Enter Apple Card.

The company known for taking CX to the next level with whatever it does has attempted to do the same thing with credit card. It has created a credit card that has no fees, reasonable APR, competitive rewards, extremely frictionless issuance, onboarding and activation, subprime coverage, value added usage features, and so on.

But the problem is, Apple is not a bank. It can’t issue Apple Card by itself. So it needs to partner with a bank that will agree to issue the card. Now, Apple Card’s terms are not very favorable to banks, so banks are not going to be too keen on issuing a new card that will hurt their existing highly profitable credit card business. According to reports, Citi rejected Apple Card.

Enter Goldman Sachs.

The world’s leading investment bank has lately expanded into retail banking in the USA with checking accounts. It has no credit card business to protect. By issuing Apple Card, GS gets the opportunity to enter the highly lucrative but extremely competitive credit card business. Perhaps, as a result of all these factors, GS agreed to Apple Card’s terms.

With what seems like a match made in Heaven, Apple Card launches in the USA.

Now, for Apple Card to launch in other countries, there are several factors:

Apple needs to find a patsy in each country à la Goldman Sachs in USA. That may not be so easy. As noted earlier, Citi already rejected Apple Card. Now, according to reports, Goldman Sachs has already started showing signs of cognitive dissonance on its Apple Card partnership. See Goldman Sachs may lose money on the Apple Card in the next recession, Nomura says.

Apple has said it won’t make any money out of Apple Card and is planning to use Apple Card to boost flagging iPhone sales. See Apple’s Credit Card Is Here. Will Its Rewards Lift Sales for the Next iPhone?. It’s questionable whether this strategy will work in other countries, especially low per capita income countries like India.

Then there’s the two factor authentication mandate for credit card payments in India. It will arguably dent the key value proposition of Apple Card, namely, superior CX.

On the flipside, many countries outside USA, are extremely underserved by credit cards. For example, India – there are only 50M credit cards in a country that has a population of 1.4 billion people and 900M debit cards. For a long time, I’ve been goading fintechs to offer credit cards in India. See When Will Fintechs Sell What Consumers Want To Buy?. Surely Apple Card will find a ready market in such markets, especially if, as pundits speculate, it will eventually be available to non-iPhone owners as well.

———-

Anything is possible. You may wake up tomorrow and find the Apple Card option in your iPhone Wallet. But, as for whether it is probable, the global trajectory of Apple Pay offers a likely clue: This last foray of Apple into payments was launched in the USA five years ago and expanded to other developed markets a year or two later. It is still not available in India.