Yael Klein On Apple’s Role In The Evolution Of Credit Cards

Wondering what Apple’s ambitions in payment mean for corporate travel? You’re not alone. Yael Klein of AirPlus International is here with her two cents.


When Tim Cook introduced the new Apple Card in March as “the most significant change in the credit card experience in 50 years,” people obviously expected greatness. But what will we really see this summer when Apple extends its in-house payment service, Apple Pay, to include the Apple Card? Banks and credit card issuers are not the only ones watching Apple’s every move in the financial sector. The business travel industry is looking to Cupertino, too, as many business travelers are loyal Apple fans and an even larger number of travelers would rather do without breakfast than their smartphones. I can vouch for that from personal experience.

As for the product, “the most significant change in the credit card experience in 50 years” seems at first glance to be a credit card like any other we’ve seen for decades. Apple will largely rely on established card infrastructures. The Apple Card was developed in cooperation with Goldman Sachs and operates on the Mastercard network. The interest rates and fees applicable to the card are typical for the U.S. market.

Subtle differences between the Apple Card made of titanium and your run-of-the-mill credit card become apparent on second glance. Apple has shed many of the features we know from other cards. You would look in vain for card numbers, three-digit security codes or signatures. The slick-looking card is only graced with your name and an embedded chip. The Apple Card uses Apple Pay for near-field communication authentication, which means it works with a face or touch ID and transmits payment data via tokens and cryptogram technologies.

Yael Klein, AirPlus
AirPlus International executive director of marketing Yael Klein

As with many other Apple products, these features are not genuinely revolutionary. We have seen for some time now apps that offer overviews of expenses and integrate them in digital wallets, especially since 2014 when tokenization (technology that facilitates the secure storage of cards and all sensitive data in a digital wallet) made its way to smartphones. Apple was dovetailing wallets and Apple Pay at that time as well.

As usual, the coolness factor with Apple is a given. The design and materials are appealing and the usability of Apple Pay is extremely customer-friendly. This does not really come as a surprise; most Apple customers think digital first. They listen to music, shop and entertain themselves digitally. They are open-minded when it comes to digital payment processes.

Apple Pay and Apple Card cater mainly to consumers whose expectations naturally differ from those of travel managers. Travel managers are less interested in a slick process; they want a reliable, undisrupted end-to-end process for their travelers. In other words, travel managers want to know that the payment process is integrated into their chain of services including booking, fulfillment and expense reporting. They need to ensure the payment process runs on (mostly Microsoft Windows-based) company computers as well as smartphones. They want to restrict payments through Apple Pay to specific purposes, such as generating card numbers for one-time use.

Travel managers will not find solutions for these needs in Cupertino but can get them from providers of travel payment services. We started exploring secure digital payment, full cost control and detailed analysis options a long time ago. With or without Apple, virtual cards play a major role in the business travel industry. For business travelers, the best payment experience is the one they don’t have. Not paying at all is better than paying conveniently. Smart corporate payment eliminates payment processes for travelers. That is not just a vision anymore; virtual cards have made it possible.

We are currently piloting a virtual card solution that can be routed back to a physical plastic card wherever digital wallets are not accepted. That includes checking in or out at some hotels and paying for purchases in countries with less developed payment infrastructure. We know from experience that this back-up plastic card should be equipped with the standard features, such as the name of the cardholder and a magnetic strip to ensure acceptance. What good is a wallet and/or virtual card to a frequent traveler if it is only accepted by 95 percent of merchants but the remote hotel where he or she is staying is in the remaining five percent? What if the merchant pulls an imprint device from a drawer which will only work if the relevant details are embossed on the card? At this hotel, the Apple Card will be out of its depth.

Over the past few years, no product category in travel payment has grown as quickly as virtual cards. According to Yahoo Finance, the virtual card market was $85 billion in 2015 and had grown to $160 billion by 2018. The market is now predicted to balloon to $500 billion by 2024. AirPlus itself is recording more than 25 percent growth per year in virtual card volume and generating billing revenue at the multi-billion-euro level.

Let’s Benefit From The Apple Card

When the Apple Card is launched, our industry will feel the pressure to innovate, but I’m not convinced that means it’s competition. First and foremost, the introduction of the Apple Card will drive the discussion about how virtual and physical credit cards are growing together. This discussion will benefit all innovative providers, not just Apple.

Let’s be honest: Apple is by no means the trailblazer with regard to this new technology, but it is the first to popularize it. This is why no bank or credit card company can afford to dismiss the Apple Card, which is another step in the credit card’s self-elimination. The future belongs to virtual payment. Maybe next time it will be the business travel industry that launches “the most significant change” in travel payment.


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Yael Klein

Author: Yael Klein

Yael Klein is executive director of marketing for AirPlus International. She has extensive experience in the international credit card business, including the past 17 years with AirPlus. After years of success in German international key account management and global sales management, Yael took over the position of managing director AirPlus UK in 2007. In that role she contributed greatly to the development of the British market. Most recently she was CEO and president of AirPlus Inc., as well as head of the Americas. Connect with Yael on LinkedIn.

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