As Apple prepares to build out
Apple this week placed Visa as the sole card network on its Apple Card virtual debit card, ending a five-year run with Discover Financial Services, which worked with Green Dot Bank to launch the card in 2017.
The move comes about two months after Apple announced plans to turn the iPhone into a payments-acceptance device by enabling Tap to Pay technology on Apple devices.
“While Discover will no longer be the payment network for Apple Cash, we remain committed to the many initiatives and programs that we work with Apple on to deliver value to our shared customers,” a Discover spokesperson said in a statement.
One observer suggests the biggest card networks jockeyed for primary positioning in Apple Pay’s next phase. “Apple switching to Visa from Discover foreshadows bigger moves to come from Apple’s contactless payments initiative,” said Richard Crone, a principal with Crone Consulting.
While Discover Network has global reach, Visa has a bigger overall merchant footprint including exclusive card-acceptance with certain stores like Costco.
“This is a significant win for Visa and a loss for Discover and its Pulse PIN-debit network, which could have benefitted from being the rails for the Apple Cash as the Apple Pay ecosystem expands,” Crone said.
Until now, the Apple Cash card in Apple Pay users’ wallets carried no card network logo. But as users refresh their iPhone or iPad settings going forward, the virtual debit card now sports a Visa logo.
There are no other changes in Apple Cash’s features, which enable users who link a debit card to add and store funds within the account, instantly send and receive funds from other Apple Cash users, and pay at merchants with contactless payment acceptance through Apple devices.
Apple in February said Tap to Pay on iPhone would become available later this year with Stripe as an initial distribution partner, enabling merchants to accept credit and debit payments through an app within their own iPhones, eliminating the need for third-party card reader.
“As Apple expands its payments capabilities enabling merchants to accept payments on iPhones, many merchants could completely bypass the need for third-party hardware to accept payments, putting pressure on hardware makes like Ingenico and even Square,” Crone said.
Executives at Green Dot were not available to comment on the bank’s future role with Apple Cash. Visa and Apple did not reply to requests for comment by deadline.
