Apple Card has officially launched in the US — with an added perk of 3% cash back (AAPL)

Adding cash back from Uber and Uber Eats could entice more consumers to apply for Apple Card, and it should incentivize consumers to use the card consistently for purchases like transportation and food delivery that may pop up regularly: 36% of US consumers reported that they used ride-hailing services in 2018 and 41% said they had used a food delivery platform in the last 90 days.

Driving usage may be particularly important in Apple Card's early days, as shaping consumers' purchase habits with the card right away may help Apple Card rise to the top of consumers' wallets. And all of these effects will be amplified if Apple adds other "popular merchants and apps," as it's promised to.

Offering 3% cash back from more merchants could strengthen Apple Card's potential to drive US adoption of Apple Pay, and it should target physical merchants in particular.

US adoption of Apple Pay has been lagging , but Apple Card and its cash-back offerings have the chance to change that.Apple Card's 2% cash back on all purchases using the digital card incentivizes consumers to use Apple Pay and may convince shoppers to use the payment option for the first time. The opportunity to receive 3% cash back with certain merchants would strengthen this possibility, especially if Apple builds a roster of companies like Uber and Uber Eats that are popular and drive regular purchases from consumers.
Using Apple Pay in brick-and-mortar stores requires more effort from consumers than using it online, so Apple should aim to offer 3% cash back from a number of popular physical retailers.Using Apple Pay online is very similar to how consumers are used to making online purchases, while in-store it requires new processes and includes the presence of cashiers and other consumers, which could cause anxiety and lead consumers not to use Apple Pay. But if several retailers offer Apple Card users 3% cash back, consumers may be more likely to use the virtual card in-store on a regular basis, so Apple should target merchants with a physical presence going forward. And considering e-commerce accounted for just 11% of US retail sales in Q2 2019 , Apple needs to capture offline purchases if it wants to maximize Apple Card's value.

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