Goldman Sachs rankles at Apple Card's 'created by Apple, not a bank' line
The investment bank Goldman Sachs has reminded financial analysts that it developed and is making all the decisions about Apple Card.
Apple's advertising does prominently feature Goldman Sachs, just not quite at the top of the screen
It's no secret that multinational financial business Goldman Sachs is the bank behind Apple Card, but the company wants to be clear that it's in charge. In a session with analysts during its legally-required financial earnings call, Goldman Sachs's Chief Financial Officer Stephen Scherr alluded to Apple's branding and advertising.
"I want to be really clear on this," Scherr told analyst Gerard Cassidy from RBC, "notwithstanding whoever lays claim to the creation of the card. There's only one institution that's making underwriting decisions, and that's Goldman Sachs."
"We have set targets and goals and objectives along with Apple as a good partner would," he continued, "and Apple is completely in the know as to sort of how we are going about these underwriting decisions."
"But the ultimate decision sits with us and so we calibrate, manage our risk and collections in the context of that. And so I think I just want to be really clear about that, it is the bank that renders underwriting decisions in that regard," he concluded.
It's known that Goldman Sachs has invested heavily on developing Apple Card -- and spends $350 for every signup -- but according to Business Insider, the company also delayed many other projects as it reassigned its engineers to the project.
The company's policies for determining credit limits has come under attack from politicians.
Apple's advertising does prominently feature Goldman Sachs, just not quite at the top of the screen
It's no secret that multinational financial business Goldman Sachs is the bank behind Apple Card, but the company wants to be clear that it's in charge. In a session with analysts during its legally-required financial earnings call, Goldman Sachs's Chief Financial Officer Stephen Scherr alluded to Apple's branding and advertising.
"I want to be really clear on this," Scherr told analyst Gerard Cassidy from RBC, "notwithstanding whoever lays claim to the creation of the card. There's only one institution that's making underwriting decisions, and that's Goldman Sachs."
"We have set targets and goals and objectives along with Apple as a good partner would," he continued, "and Apple is completely in the know as to sort of how we are going about these underwriting decisions."
"But the ultimate decision sits with us and so we calibrate, manage our risk and collections in the context of that. And so I think I just want to be really clear about that, it is the bank that renders underwriting decisions in that regard," he concluded.
It's known that Goldman Sachs has invested heavily on developing Apple Card -- and spends $350 for every signup -- but according to Business Insider, the company also delayed many other projects as it reassigned its engineers to the project.
The company's policies for determining credit limits has come under attack from politicians.
Comments
I imagine that Apple could have taken the idea to pretty much any credit card company.
Matt Taibbi, Rolling Stone Magazine, 2009
Also, this $350 estimated acquisition cost for each Apple Card user came from the idiot analyst at Nomura who has had a $230 price target on Apple until today. I bet the vast majority of signups are generated by people simply opening their Wallet app (aka. almost "free" customer acquisition)
Apple deserves credit, I don't know how much but not all of it. A lot had to be done on the financial side as well. But it might be good marketing tactics to say "Created by Apple, not a bank' given G-S' history. "Let us, G-S, into your account. What could possibly go wrong" isn't much of an add campaign.
On the plus side, the time required using my bank's bill pay to get an Apple Card payment posted is down to 4 days instead of 8. It's probably not as fast as using the app. I'm picky about who debit my account and right now that's nobody.
HOWEVER,
Who here (that has an Apple card) would NOT have an Apple card if Apple had not partnered with GS? I really, really doubt anyone would have cared unless Apple partnered with some soulless bank known for scammy behavior.
Hmm.
Nobody checks its merit and Apple gets the blame. G-S didn't help when they immediately boosted the guy's wife's credit limit. People called that an admission of guilt.
Gov't officials, here to help, couldn't resist the rush to hitch their teams to the MeToo bandwagon and call for an 'immediate' investigation of Apple and G-S.
I'd like to have seen G-S reply with 'We've examined the credit history of both Mr. and Mrs. Important Developer and are ready and willing to go on record for the as to why she got a lower credit limit. Just give us the word, Mr. Important Dev. Hint: nothing in our code and algorithms says reduce females' credit limit by 40%' and 'Ignore Woz's blathering'. The Govt has yet to tell us that Apple and G-S were caught lowering the glass sealing.
Mentioned above as a comparison was Apple's partnering with AT&T for their iPhone. But, it wasn't AT&T -- it was Cingular. Unlike other providers, Cingular was willing to design and implement unique cellular features demanded by Apple. Before the Apple/Cingular, cellular providers controlled all the features of the cellular systems -- many capabilities of cell phones pre-iphone had features not supported by the phone companies -- I owned several such cell phones and they were all broken in some form or another by restrictions by the likes of Verizon, etc.
Because GS did not have a consumer credit card, GS had to develop a system on their end from scratch which supported Apple's concepts. I don't think Apple had a lot of choices of national banks who could or would underwrite the Apple credit card and develop systems to support it. My guess is banks with legacy systems are running their credit card systems on 50 year old Cobol programs -- they can't change.
Otherwise Apple would get all the ‘credits’.
Absolute assholes, Apple should get rid of them as soon as possible and start Apple bank (you know for the common good, a green bank, helping others, having morals (that should be a first for a bank)).
Apple bank would be a resounding succes, with honest people at the helm.
I doubt you would believe that big institutions have bias in regards to gender or race because it has never happened to you therefore it does not exist and those that claim it does are liars.
It would likely take longer than 3 months for Apple to switch the backend banker. It took Costco over a year to switch from Amex to Visa.
I mostly agree with Macgui about Apple's decision to use AT&T, but I don't think AT&T would've been the only one to come on board. T-Mobile and others were too small, and Sprint was on death's door for the last couple decades in my opinion, and MVNOs and regional carriers wouldn't work, but I think all would've been glad to have Apple come knocking on their door. The other two options were Verizon and AT&T. Verizon being the clear top dog then could demand terms, and there's word that Apple went there first, but I wonder if that was more of a ploy to get AT&T to roll over with less of a fight as the CDMA-based network was not the ideal start for a tech company getting into the cell phone business.
I have similar allowances between my Chase card and my Apple Card. But my first name is George. I doubt it was gender.