Comment by TazeTSchnitzel
3 days ago
Goldman Sachs was new to consumer banking and it has long been apparent that Apple outplayed them with the Apple Card deal, causing them to lose a lot of money, and so they have been wanting to get out of it: https://appleinsider.com/articles/23/10/16/goldman-sachs-reg...
This is impressive because whenever I hear Goldman Sachs, this line by Matt Taibbi comes to mind:
(https://www.rollingstone.com/politics/politics-news/the-grea...)
This only works until you find a bigger vampire squid (Apple).
That article is dated April 2010. iPhone 4 came out Jun 2010. Finance was already in the process of taking a back seat to tech.
HST’esque
I don’t really get why it’s a bad deal for GS or how “Apple outplayed them” based on that article. Just seems like a frayed partnership cause they didn’t hit their numbers.
The Apple Card has a lot of sub-prime borrowers because Apple pushed to approve almost everyone.
Plus Apple had things structured for fewer fees to be charged than normal cards for late payments, foreign transactions, etc.
That combination meant GS didn’t see the expected profit and in fact lost money (reportedly).
Does that mean that this new partnership will be better because Chase is better at consumer banking than Goldman Sachs, or Chase negotiated a deal that will not cause them to lose a lot of money?
If it's the latter, does that mean that the card rewards for Apple Card will get worse?
> If it's the latter, does that mean that the card rewards for Apple Card will get worse?
Can it really get worse? All they do is a 2% cash back if you use Apple Pay, and 1% if you use the physical card. Ok if you buy directly from Apple it’s 3% back but that’s hardly “good” - you get a couple of bucks for buying an AirPod.
The Apple Card has no interesting perks compared to existing Chase offerings.
> Does that mean that this new partnership will be better because Chase is better at consumer banking than Goldman Sachs, or Chase negotiated a deal that will not cause them to lose a lot of money?
The partnership between Apple and Chase is not new, even though this particular credit card product offering is. There is another quite popular form of payment Apple has supported for years which necessitated this partnership to be established.
> does that mean that the card rewards for Apple Card will get worse?
the card rewards for AC were pretty awful in the first place. It's only useful as a store card that offers 0% financing.
the deal is probably more in favor of chase when it comes to the fee schedule and various issuing bank and interchange fees (ie, the ~2-3% that card networks charge to merchants)
I predict the perks will get worse. Chase already lost money on Sapphire Reserve so they're probably not eager to do that again.