Apple’s Switch to Visa for Its Virtual Cash Card Could Come Down to International Connections

Apple Inc. is switching its network affiliation for its Apple Pay Cash virtual debit card to Visa Inc. after more than four years of issuing the card on the Discover Network. Information about the rationale for the move was not immediately available as the news emerged late last week on various technology sites that follow Apple. 

Neither the computing giant nor Visa immediately responded to questions from Digital Transactions News concerning the move. Green Dot Bank, which has served as the issuer of the Apple Pay Cash card, also did not respond to questions regarding the new arrangement.

“Discover is proud of our involvement in bringing the Apple Cash functionality to market in collaboration with Apple in 2017,” Discover said in a statement on the matter. “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.”

The virtual card allows users of the Apple Pay digital wallet to conduct transactions at merchant locations and sites using the funds they earn and accumulate in the Cash feature of Apple Pay. Apple and Discover announced the network tie-up for the card in December 2017.

Observers speculate the switch to Visa has to do, at least in part, with Visa’s wider merchant coverage internationally. Domestically, Discover has worked to close its acceptance gap with both Visa and Mastercard. “Visa can offer better international coverage. Visa will get them [more locations],” says Patricia Hewitt, principal at PG Research & Advisory Services, Savannah, Ga. Other possible inducements could include a bigger cut of interchange income and possible plans at Apple to expand the card’s features, she speculates.

“If Apple is looking to expand [Apple Pay] beyond the U.S., this [move to Visa] gives them flexibility,” agrees Sarah Grotta, director of the debit advisory service at Mercator Advisory Group, Marlborough, Mass. “Visa may be able to open up some money-movement solutions in [foreign] countries, and connect Apple to one of the domestic networks” overseas, she adds.