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Apple pulls plug on Goldman credit-card partnership

wsj.com

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Re: Apple pulls plug on Goldman credit-card partnership

#91

Post by quickthrowman »

herpdyderp wrote: post #26
cpncrunch wrote: post #10

This article is paywalled, with no way to bypass. Non-paywalled summary here: https://www.theverge.com/2023/11/28/23980261/apple-is-report... Can I assume everyone commenting here has a WSJ subscription?

I didn't read it but am still participating. Since I've been aware of this story for quite some time, the fact that it finally happened is all that really matters to me (which the headline covers, assuming it's correct). I probably know all the details already, unless something really unexpected happened.

> I probably know all the details already, unless something really unexpected happened.

There was a late addenda to the agreement; as a concession on behalf of Goldman Sachs, David Solomon agreed to DJ at Tim Cook’s eventual retirement party (for half of his normal fee).

Re: Apple pulls plug on Goldman credit-card partnership

#92

Post by CubsFan1060 »

dimmke wrote: post #34
balderdash wrote: post #7

I’m curious why Apple is moving to terminate as opposed to getting GS to buy them out of their contract?

My theory about the Apple Card: Goldman Sachs is not setup to be a direct consumer bank. This caused a lot of problems: * The ease of sign up / approval led to a lot of subprime approvals that might not have gone through with a more established lender. Not only did this cause GS to lose money on delinquent accounts, it prevented the Apple Card from ever becoming a status symbol. * Goldman Sachs developed a reputation…

> But whipping out your phone sucks compared to just tapping your card against a reader.

And I’d have said whipping out my card sucks compared to using the watch that’s already on my hand. (Of course that works with my other cards as well)

Re: Apple pulls plug on Goldman credit-card partnership

#93

Post by posguy »

toomuchtodo wrote: post #51
CydeWeys wrote: post #48

Earlier quoted context omitted.

There are lots of downsides to actually becoming a bank, though. It creates many restrictions on the kinds of things you can do, and unless it's the majority of your business, it's not something you want. Better to work with banks but not be a bank yourself.

I suppose it’s going to depend on how many willing partners are out there with an appetite to be beholden to Big Tech as the smaller partner with less leverage. Evolve just dumped a bunch of fintech partners over the last year (conversely, they were aggressive in who they were willing to partner with), and moving is not trivial. While Apple has deep pockets, I’m sure engineering time is better spent delighting users…

Depends if Apple really feels they can run a backoffice banking arm effectively and cheaper than a partner that is already at scale.

Underwriting credit & customer risk, handling edge cases, maintaining relationships with ATM networks, card networks and ensuring compliance with state and federal banking rules is quite an undertaking.

Goldman Sachs did not have scale like Chase, Capital One and others to create a diversified portfolio of clients, limiting their ability to hedge against the risks of a single platform or two dominating their involvement in this market. One bad software update by Apple could flood their support queues, and they can't afford to keep significant staff on hand to keep wait times below an hour (unlike a larger company, who is already staffed up to serve their non-Apple customers).

Re: Apple pulls plug on Goldman credit-card partnership

#94

Post by madeofpalk »

dimmke wrote: post #34
balderdash wrote: post #7

I’m curious why Apple is moving to terminate as opposed to getting GS to buy them out of their contract?

My theory about the Apple Card: Goldman Sachs is not setup to be a direct consumer bank. This caused a lot of problems: * The ease of sign up / approval led to a lot of subprime approvals that might not have gone through with a more established lender. Not only did this cause GS to lose money on delinquent accounts, it prevented the Apple Card from ever becoming a status symbol. * Goldman Sachs developed a reputation…

I honestly cannot remember the last time I physically used a card to pay. I think I’ve exclusively used Apple Pay all year… (UK)

Paying with your phone is pretty ubiquitous here.

Re: Apple pulls plug on Goldman credit-card partnership

#96

Post by CobaltFire »

kmbfjr wrote: post #50
wdb wrote: post #14

Earlier quoted context omitted.

Yeah, I had an Amex card and it was pretty useless in Europe. Admittingly that was more than five years ago so maybe things have improved by now.

I have used my AMEX in The Netherlands and Belgium…once. The foreign transaction fees are steep.

I have to ask which AMEX. I used my Platinum overseas quite a lot (they give all AMEX cards free to US Military) and never had cause for complaint.

Re: Apple pulls plug on Goldman credit-card partnership

#97

Post by troupe »

giobox wrote: post #11
parl_match wrote: post #5

Earlier quoted context omitted.

The rumor is that Apple Card will move to Amex. WSJ says 12-15 months, but AppleCard is contractually obligated to use the MC network until 2025. I can't imagine they'll close all those accounts, so likely we'll see some sort of migration leading up.

This would be a bit of a detractor for me, Amex is not as widely accepted, especially when traveling in Europe. Mastercard is accepted virtually everywhere in the EU and UK.

In the US, that situation has dramatically changed in the last 3 years or so.

Re: Apple pulls plug on Goldman credit-card partnership

#98

Post by tehwebguy »

delfinom wrote: post #75
arcdigital wrote: post #4

Earlier quoted context omitted.

I'm assuming it will be just like any other time a card portfolio is sold or transferred (Costco Card: Amex -> Citi, REI Card: US Bank -> Capital One, GM Card: Capital One -> Marcus (which is Goldman, ironically I think they want to get rid of this card too), etc...). Unless Apple discontinues the card completely, they will choose a new bank, that bank will take on the existing portfolio, everyone will get new cards…

>Unless Apple discontinues the card completely, they will choose a new bank That's the problem. All other banks turned Apple away because Apple was demanding some significant concessions. Goldman agreed to them because at the same time they were trying to break into the consumer business. Apple will have to cave.

That was before Apple had however many card customers they now have.

Re: Apple pulls plug on Goldman credit-card partnership

#100

Post by jkubicek »

dimmke wrote: post #34
balderdash wrote: post #7

I’m curious why Apple is moving to terminate as opposed to getting GS to buy them out of their contract?

My theory about the Apple Card: Goldman Sachs is not setup to be a direct consumer bank. This caused a lot of problems: * The ease of sign up / approval led to a lot of subprime approvals that might not have gone through with a more established lender. Not only did this cause GS to lose money on delinquent accounts, it prevented the Apple Card from ever becoming a status symbol. * Goldman Sachs developed a reputation…

I've had the Apple card since it was launched and have had one or two fraudulent charges, they were trivially easy to resolve, everything occurred via iMessage for Business.

I don't mean to diminish your negative experience, but it's not universal.

> The card itself was just not competitive in terms of rewards. The UI/UX of the app and the deeper integration into the Apple ecosystem was nice... (if a bit confusing) but when I moved over to Chase I found myself not really missing it at all.

The Apple rewards were quite a bit more generous than my previous card. I just looked at the Chase CC landing page and the rewards didn't look any better than my Apple Card. Which Chase card did you move to?

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