Story behind Apple's credit card with HDFC 🤯

It's not distribution or just affluent users, it's more than that.

Jun 26, 2023

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In 2017, Apple started India manufacturing. By 2023, it opened the first 1st retail store in Mumbai’s BKC. In few weeks, it’s launching a credit card with HDFC. This is the breakdown of why two giants are coming together ⬇️

Quick context 🗓
It all started yesterday with Apple completing selling 6 million smartphones last year. The apple CEO visiting India & opening the BKC store in Mumbai. It isn't a coincidence.

Apple aspires to make India it's 3rd largest market after US & china. And it's pretty aggressive in how it thinks about the India market beyond just hardware selling.

Why launch Apple card with HDFC Bank? ⬇️

1/ Apple's core loop is software sells 🕹
Apple pay becomes the default option for iOS users to make purchases across the apple "App store". Apple makes ~30% commissions on "in-app purchases".

2/ Value of for iOS ecosystem goes up 📈
As a apple ecosystem user, the work device (Mac), Mobile (iPhone), Earphones (AirPods) & even wearables (iWatch) will be able to sync with Apple pay. Making it a seamless experience to pay in the offline world.

3/ HDFC = distribution 🔥
It's the largest bank by market cap & has all the high value customers that gives apple the right kind of distribution (retail customers & merchants). Apple doesn't have to figure this on their own.

4/ HDFC wants the high value wallet share 💳
Apple customers are the most "affluent spenders". These are the kind of audience a bank would want to lend to - super low default rates on lending, plus there is so much you could cross sell to a savings account user.

5/ But, why not launch it's own card? 🙇🏻‍♂️
Just like how Apple does it in the US (sure, the chase powered). Indian laws are amazingly strict on what a foreign non banking entity like Apple can and can't do in India. Apple can't win that war.

6/ What could do wonders to this deal? 💸
Visa is in the race to make sure it powers the "Apple Pay <> HDFC" credit card. But, with RuPay push from the Indian government, it could be a game changer.

7/ RuPay opens the "Credit on UPI".
And Apple + HDFC would love to own the UPI pie of these "affluent spenders", that way there is no way this card does not become the most sought-after card in India - at least for iOS users. Exciting times ahead for sure.

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