Apple's popular Apple logo seen at the Passeig de Grcia store in Barcelona, Spain. (Photo by Paco ... [+] Freire/SOPA Images/LightRocket via Getty Images)
The pomp and circumstance of the Apple credit card launch has left people wondering why there wasnt as much excitement about the news of Googles venture into checking accounts. Does this mean Apple is better, or more consumer-friendly than Google?
Despite speaking to some of the most respected and informed minds in the fintech industry, this question remains unanswered and the general consensus is simply that the two are incomparable because it is a question of trust.
A couple of weeks ago and around the time that it emerged that Google would be partnering with Citigroup and the Stanford Federal Credit Union to offer checking accounts, a Twitter poll from Chris Gledhill caught my eye because it revealed that a staggering 70 percent would not open a bank account with Google. But why? Apple also has the support of Goldman Sachs and Mastercard, so it didnt make sense to me at first.
When comparing Apple Pay and Google Pay (Send), they both offer similar services: ability to use with credit and debit cards, credit card fees around 3 percent for merchants, free debit fees, withdrawal speed of up to one to three days and transfer limits of around $10,000.
However, despite Google Pay being compatible with Android, Web and iOS, Apple Pay transactions have reached above three billion, surpassing PayPal and leaving behind the far less popular Android NFC payment alternatives, according to Apple Insider. I then considered the brand psychology of Apple.
I spoke to consumer psychologist at digital marketing agency SYZYGY and lecturer at the University of the Arts London Dr Paul Marsden, who believes that the biggest digital disruption occurring today is not in technology, but inside peoples heads.
The way that technology has influenced our expectations, relationships and identity has meant that we require everything on-demand, from pizza to Netflix to sex. We are all chronically impatient.
Dr Marsden highlights that digital is creating a trust deficit in society, fueled by fake news, mass propaganda and substantial data breaches such as the Cambridge Analytica scandal and therefore, consumers are becoming less trusting of brands.
In a similar vein, when asked about the negative reaction towards news of the Google checking account, Roisin Levine, Head of Banks at Flux, also says that it could be down the growing concerns around the possible misuse of powerful data sets by tech companies.
Following Facebooks involvement in the Cambridge Analytica scandal, mistrust of Big Tech has (somewhat understandably) heightened and the argument to Break Up Big Tech is now commonly used during the current American political debate.
Looking at the drivers of trust, Dr Marsden illustrates how Apple has found a way of tackling the real cause of this trust deficit. The psychology of trust - whether its a human, brand or app - is based on two dimensions: competence and intention, can they help and do they care enough to want to help?
When looking into banking and what is driving the trust deficit in this industry, it is not that people feel that banks are incompetent managing our money, it is that they are uncaring. They do not want to help us, they want to harm us.
However, since rumors of an Apple credit card emerged, the tech giant has focused exclusively on showing that the company cares about people and their financial health and wellbeing. In addition to this, Apple have continued to show that they are a privacy-first organization and have doubled down on ensuring customers are aware that they respect peoples security - that respect can translate to a sense of caring, Dr Marsden says.
On the subject of financial wellbeing, he says that it seems as if they have taken the Apple Health app and instead of fitness and activity rings, you have interest rings. They walk the talk of actual care. Financial health indexes are not new, but what Apple has tried to do is put the customer first and provide practical services that make it stand apart from heritage banks and fintech companies.
Apples simplicity and transparency is rebuilding trust and explains the success of the company. Why cant heritage banks and fintech companies do the same? They have revenue to think about. Dr Marsden adds: The reason Apple can do this because they dont actually have to make any money out of this. Banks and fintech startups have got shareholders or VCs breathing down their necks.
On this subject, Sam Maule, Managing Partner - North America at 11:FS says: Apples chief motivation for the Apple Card offering, in partnership with Goldman Sachs, is creating a deeper customer relationship centered around the Apple ecosystem.
And the Apple ecosystem is centered around hardware, specifically the iPhone. The concept for Apple is straightforward. The more transactional activity it can lock into the Apple ecosystem, the more loyal the Apple consumer is to the brand. And we all know how loyal Apple fans are to the brand.
Suresh Vaghjiani, CEO & Co-Founder of Tribe Payments, has a stronger view and claims that Google is often seen as a poor copycat - coming to the market with me-too offerings. Google Pay shortly after Apple Pay and now Google Checking after Apple, Amazon and Facebook have made major plays.
It remains to be seen how much incremental changes such as removing card numbers from credit cards will impact security and financial crime, but in the short term, this is perhaps another way that the Apple brand is showing that it cares about its customers.
Dr Marsden adds: Whats smart about Apple is while other Big Tech companies are monetizing and manipulating consumer behavior by using their data, they have taken a stand against it, sometimes resulting in controversy e.g. when the police need to access a criminals phone.
Privacy is a fundamental human right; they have built that protection into their services. From a psychological perspective, it would be challenging for Uber to have the same effect with Uber Money, but not quite as challenging as Facebook using cryptocurrency.
Vaghjiani has a similar attitude and says: Apple has an incredibly strong brand and unrivalled track record when it comes to the users experience in particular it has taken a strong stance on privacy. Last month its iPhone advert said We believe your privacy should never be something you have to question.
While Adam Gibson, Executive Director, Skymind Global Ventures adds that Apples business model allows it to focus on prioritizing user privacy over selling ad targeting and Google gives away its software and collect data from it - so banking is just another scheme to collect data from its users, Alex Batlin, CEO, Trustology agrees and says that Apple has made a big play to sell products and services whereas Google has made its play in monetising data.
Levine takes this one step further. While the reaction Apple received was overwhelmingly positive which shows consumer appetite, criticisms of Googles new project may seem unfair as Google have explicitly said that it will not sell any of the data.
However, she adds that the keen eyed will note that Google are yet to say that they will not use any of the data for marketing purposes. It would seem obvious for Google to leverage their expertise in this area to potentially surface targeted advertisements based on spending habits and use this new information to prove conclusive ROI to merchant partners.
Maules view is that at its core, Google is an advertising company. While it is similar to Apple with respect to aligning users to the Android ecosystem, Googles key focus is on analysing customer transactional data with the intent of monetizing this information. And this is where the key difference between the two products differs.
How willing will consumers be for Google to have such access to their financial lives; even more importantly is how willing will consumers be for Google to profit from the monetization of this information?
Apple has addressed this head on by their insistent messaging concerning data privacy with respect to their financial product. Google has expressed the same messaging; however, their track record concerning consumer data and advertising data doesnt particularly align with this messaging.
However, Googles dataset analysis capabilities must not be undermined, especially when being compared to traditional banks. Google may be able to provide new levels of support to its banking partners around this and if they are able to demonstrate value to the Google Checking Account consumer base then they may be able to make a dent in the marketplace."
Since launching in the U.S., Apple have already got themselves involved in a sticky financial data situation and the tech giant was called out for gender bias within their credit algorithm.
Although Dr Marsden acknowledges that the tweet that was sent out caused a minor media storm, he states that as long as Apple can dissociate itself from the algorithm, given the power of the Apple brand, people will forgive and forget relatively rapidly.
The tweet was about credit limits and it can be spun both ways: Apple is unfairly putting men at increased risk of debt that they cant afford, or its saying that women cant pay debt.
Michael Kent, CEO, Azimo also believes this will happen: I dont think Apple is better than Google, its just that they have different core business models that mean people are more sensitive to privacy concerns around Google.
Witness the backlash to their cloud hosting deals in the healthcare sector where Amazon, IBM and Microsoft have far fewer problems. I do think its something the market will get over.
Robert Courtneidge, CEO of Moorwand, makes an interesting point. Not only has the Big Tech giant not made it in time to be first - Facebooks Libra launched in June, Apples credit card in August were also yet to see if it can be the best.
But Google wont be the only one that experiences this scrutiny. A bad air is settling around Big Tech banking that is becoming hard to brush off that could be why Google has opted to lead with Citigroups branding rather than its own. At this point, another venture gone wrong could be the nail in the coffin.
Nevertheless, a recent McKinsey survey has shown that 58 percent of US consumers say they would trust financial products from Google, 64 percent for Amazon and only 31 percent for Facebook.
Levine says that if Google is able to provide an enticing array of loyalty rewards and a great personal finance tool for customers, then it is difficult to see how this could not be a success given their brand and marketing capabilities.
Dr Marsden concludes by saying that it would be a relatively unfair comparison to pit the Apple credit card against the Google checking account. Its abstract because Googles product has not yet been launched. That said, with Google bidding for Fitbit and discussion around health record and data, it is important to remember that Google is not Apple.
Apple is building brand equity around the idea of privacy and Google is a company that makes money out of advertising.
See original here:
Why Is Apple Trusted More Than Google? - Forbes
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