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Apple's Credit Card: What Small Businesses Need to Know

Stella Morrison
Stella Morrison

Though the Apple Card is for consumers, small business owners can take advantage of some of its perks.

  • Launched in 2019, Apple Card offers great benefits for consumers, including quick cashback and no fees.
  • While Apple Card does not have a business option, solopreneurs and small business owners who use personal credit to fund business expenses can take advantage of the rewards.
  • Apple Card is a Mastercard issued through Goldman Sachs. As such, most small businesses can accept it from customers as a payment method.
  • This article is for small business owners or solopreneurs weighing the advantages and disadvantages of the Apple Card, either to accept as payment or to use for their small business.

The Apple Card launched in 2019 with a suite of features that appeals to both Apple-product lovers and those who do not use iPhones, Apple Watch or other electronics from the tech giant. Although the company doesn't offer a business credit card, the Apple Card's unique features may be beneficial for self-employed individuals and small business owners. Here's what the Apple Card offers and how you can put it to work for you.

 

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Image credit: Apple

Apple credit card benefits and fees for consumers

The Apple Card is a rewards-based credit card that gives consumers cash back on various categories of purchases. Because Apple is pushing the card as part of its ecosystem, users reap more rewards when they buy Apple products and use Apple Pay on their iPhones to pay for purchases. But customers still get a 1% reward if they use it for other purchases. Cashback rewards are deposited daily – not monthly, like most cards do – under Daily Cash in the Wallet app.

"It's not a bad card," said Chris Kuiper, equity analyst at CFRA. "It's got cashback. It's got 1% on everything – 2% if you use Apple Pay, which is becoming a bigger thing, and 3% on Apple products. But for all the other benefits, other cards already offer them, or you can get specialized cards for those things."

In addition to using Apple Card with Apple Pay, consumers can use a physical version of the card for purchases from vendors that do not accept Apple Pay. It's a sleek titanium card with the customer's name etched into the surface – which is noticeably devoid of other information, such as the credit card number, CVV number, expiration date and signature box.

In a helpful move for consumers, the Apple Card doesn't charge late fees, annual fees, cash-advance fees, international fees, over-limit fees, financing fees and many more pesky fee structures that other cards charge. It shows the cardholder exactly where and how much money was spent and automatically breaks down spending into color-coded categories. Cashback rewards are dispensed daily and can be spent immediately.

The entire system is designed to give customers more control over how much they spend and get back, combined with the flexibility of using the iPhone with Apple Pay for purchases and the physical Apple Card at places that do not accept Apple Pay. Millions of retailers now accept Apple Pay, although not all consumers with iPhones use it. According to a PYMNTS report, only around 8% of iPhone users regularly use Apple Pay.

Key takeaway: The Apple Card offers a zero-fee structure, quick cashback rewards, and a sleek design that fits in well with other Apple products.

Benefits of the Apple credit card for small business

Observers note some respectable and unique, if not revolutionary, touches to the Apple Card, such as machine learning and geolocation tracking of your spending. These features may be exciting for consumers, but what about for small businesses?

Rivka Gewirtz Little, research director for global payment strategies at IDC, said that Apple needs to "do something to make the Apple Card more relevant" for small companies because, despite "some nice and usable elements, it is a consumer product. This does not appear to be a business or corporate offering."

Nonetheless, Little said there are some attractive management and visibility features that would benefit very small companies and solopreneurs who don't mind using personal cards for business expenses.

Image credit: Apple

1. Apple Card offers spending insights that are easy for solopreneurs to track.

When you use the Apple Card, it gives you reports of where and how you spent your money, which are easy to access through the app. Built-in fraud protection and the instant sign-up and deployment may also throw the Apple Card into the plus column for very small business operations, since it cuts back the waiting time generally needed to get a credit card up and running.

But there are limits to those advantages. "There are some nice features in terms of manageability and visibility of spending, so if you're really a small company, it could help you," Little said. "But if you have more than a few people, then you want to have a view of what everyone is spending on your company card, and at that point you're going to need a procurement card and some sort of management app."

2. Financial health tools attached to the card can help small businesses.

Lisa D. Ellis, partner and senior equity analyst at MoffettNathanson, said the Apple Card's reporting tools set it apart from other co-brand credit cards like the Amazon credit cards, PayPal Cash Card and Nordstrom Card.

"The primary differentiator of Apple Card is that Apple is launching a set of 'financial health' tools tied to the card, analogous to the 'physical health' tools Apple has tied to Apple Watch, like monitoring your heart rate or tracking steps," Ellis said. "The financial health tools will enable the cardholder to better track expenses [and] manage credit."

3. Businesses can save on credit card fees with Apple Card.

Credit card fees can quickly add up, putting a burden on a solopreneur who is already carefully watching their spending. Because it doesn't charge the many fees that other business and personal credit cards do, solopreneurs can more comfortably – and strategically – use Apple Card to make essential business purchases.   

Key takeaway: While the Apple Card is not offered as a business credit card, solopreneurs and self-employed individuals may find the financial insights, expense tracking, and no-fee perks helpful.

Can small businesses accept Apple Card?

Small businesses that want to accept Apple Card may already be able to do so if they have relatively new credit card processing equipment that includes EMV and NFC technology, which allows them to accept chip cards and contactless payments. If you only have a chip card reader, your customers can use that to pay with the physical Apple Card. [For credit card processing recommendations, check out our best picks page.]

"In terms of small businesses accepting the card, it [is] run through Goldman Sachs and the Mastercard network, so … the real question is whether they want to integrate the whole Apple Pay system," Kuiper said. "That's just going to come down to how much convenience they want for their customers and if they think that's going to open up a whole new swath of clientele or customers that they wouldn't have before – like, would someone pop into one store over another because they accept Apple Pay or don't?"

One incentive to integrate Apple Pay is the rising interest in contactless payments. Usage of contactless payments has risen by 150% since 2019, driven by the COVID-19 pandemic and consumers' increased preference to tap their iPhone or Apple Watch instead of touching shared surfaces.

Key takeaway: Small businesses can accept the physical Apple Card using a chip card reader and the Apple Pay version using a contactless card reader. Consumers increasingly prefer contactless payments, which is largely due to the COVID-19 pandemic.

Bottom line on the Apple Card

Some observers take a distinctly optimistic view of the overall Apple Card zeitgeist because accepting the card will be a straightforward process for small companies, especially those familiar with Apple Pay.

"For small businesses and retailers that operate online and already accept Apple Pay, this is a huge benefit, as consumers will be anxious to use the card and begin shopping online at participating stores," said Bart Mroz, CEO of SUMO Heavy, a consulting firm specializing in digital commerce strategy, design and development.

For businesses that do not yet support Apple Pay, the titanium card's link with Mastercard will encourage its use, widening the potential for additional customers and profits.

Whatever judgments small companies may have about the Apple Card, they can be sure of certain benefits: fewer fees and instant rewards. Beyond that, it gives you the ability to accept payments your customers make with the Apple Card and Apple Pay, giving them the convenience of using their preferred payment method at your business.

Jackie Dove contributed to the writing and reporting in this article. Some source interviews were conducted for a previous version of this article.

Image Credit: Sitthiphong / Getty Images
Stella Morrison
Stella Morrison
Business News Daily Contributing Writer
Stella Morrison is an award-winning writer who focuses on marketing for small businesses, including useful tools and best practices that help business owners introduce their products and services to new audiences. She is also a digital marketing professional who has worked with leading brands in the tech industry.