American Express doesn't seem that interested in an Apple Card partnership

AppleInsider

American Express may be in the minds of analysts as an Apple Card lender replacement, but the company's CEO doesn't seem that excited about the prospect.

Apple Card

The dance pairing Goldman Sachs with Apple for Apple Card started well, but as 2023 has progressed, has turned increasingly hostile. After months of reports about a disgruntled Goldman Sachs, the companies are expected to part ways in about a year.

Apple chimed in on the reports, and said that the pair are still "are focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them."

However, the breakup seems imminent. And, analysts suggested that Goldman Sachs could be replaced by American Express or Chase.

But, when asked about it indirectly at the Goldman Sachs US Financial Services Conference, American Express CEO Steve Squeri seemed to throw cold water on the idea.

"When we look at co-brand partnerships - and we have over 50 co-brand partnerships - you're really looking for one plus one equals three," Squeri said without naming Apple Card specifically, as reported by Payments Dive on Thursday.

Squeri went on to say that there need to be "great value propositions" for American Express when there's a partnership like there would have to be for Apple Card. Reportedly, a big consideration for Amex is premium customer targeting.

"Because that's what you want a co-brand partnership for, is the distribution, as well," Squeri said. "And does it add value to both brands? And do you create premium economics? So, as we evaluate partnerships, that's the lens that we use."

It's not clear if Amex considers Apple Card holders "premium." Reportedly, one of the sticking points between Apple and Goldman Sachs was that Apple required very wide acceptance, which has reportedly lead to large losses for the lender.

"Sometimes the partner wants to reach into everybody, and that's just not who we are," Squeri added.

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darkvader

Good, because I see no value in having an American Express card.  They're not accepted most places any more, probably because their merchant fees are exorbitant.

chadbag

Good.  No need for another Amex based card.  

Hopefully who ever dies the partnership with Apple keeps it a Mastercard.  I have a billion Visa cards but only one other Mastercard beside the Apple Card and for some reason JR East (Japanese rail company) allows you to load your virtual Suica cash/transportation card using Apple Pay but not with Visa.  Mastercard (and Apple Card ) works great.  I think Amex also works but I have no need of another Amex card but a master card is usable pretty much everywhere. Plus JR East. Since we travel to Japan every other year and the whole family has virtual Suica cards and I can share my Apple Card with family members and Apple Pay, the whole
family can easily add to their Suica.  

eightzero

darkvader said:

Good, because I see no value in having an American Express card.  They're not accepted most places any more, probably because their merchant fees are exorbitant.

The only reason I have an Amex card is that the branded version comes with specific benefits for the branded merchant. I use it for nothing else. Where there's a perk, discount, or (best of all) a statement credit, out it comes, and then only for something I was going to buy anyway. The annual fee is significant, but given my plans for its use, I easily get that back each year. It is not a "go to" consumer card. But then, these same things apply to my GS Apple Card. When I get 3% and free finance on an Apple product, fine. The really nice Ti physical card that came in the mail has never left the bottom drawer of my (locked) desk.

I'll play along with these credit card issuers when the table is tipped in my favor.

neverindoubt

chadbag said:

Good.  No need for another Amex based card.  

Hopefully who ever dies the partnership with Apple keeps it a Mastercard.  I have a billion Visa cards but only one other Mastercard beside the Apple Card and for some reason JR East (Japanese rail company) allows you to load your virtual Suica cash/transportation card using Apple Pay but not with Visa.  Mastercard (and Apple Card ) works great.  I think Amex also works but I have no need of another Amex card but a master card is usable pretty much everywhere. Plus JR East. Since we travel to Japan every other year and the whole family has virtual Suica cards and I can share my Apple Card with family members and Apple Pay, the whole
family can easily add to their Suica.  

Yes, you can also load Apple Wallet SUICA cards with AMEX credit cards.

I've heard that VISA cards issued in Japan can load value on those SUICA cards, but as you noted, most VISA cards can't.

rob53

The only reason I have an Amex card is because Costco used to use it as their main credit card. They changed to Visa, which helped because (if I remember correctly) Canada didn't take Amex Costco cards. I keep this card for credit score reasons, making one purchase annually to keep the account open. 

jgreg728

We're not interested in an Amex partnership either lol. Mastercard all the way.

lordjohnwhorfin

darkvader said:

Good, because I see no value in having an American Express card.  They're not accepted most places any more, probably because their merchant fees are exorbitant.

The day they let their Costco partnership expire is the day they killed their own stupid brand. I replaced my Platinum with a Sapphire Reserve and never looked back.

bala1234

I guess its not very different from 'analysts' predicting that Apple may buy Disney. Everything seems to make sense except if it benefits Apple (Amex in this case) in anyway.

ApplePoor

I have enjoyed the daily cash back on the Apple Card vs CostCo annual distribution.

I have had a premium (now Platinum) American Express card since 1968. Back in the day, there was no limit on that AmExp card because only those that were credit worthy would have such a card.

The Apple actual credit card has resided in a secure location and never been used. AmExp is used for international airlines for trip protection and they would get one back to the US. 

If the Apple Card vaporizes, I will get along just fine without it.

caskey

darkvader said:

Good, because I see no value in having an American Express card.  They're not accepted most places any more, probably because their merchant fees are exorbitant.

That's a load of BS...I put 99% of all my spending in the US on my primary AMEX card and have maybe been turned down by 1 or two merchants out of hundreds and hundreds and it's usually some chain that has a very exclusive VISA or MC partnership. AMEX is accepted virtually everywhere. You may not personally want to use one, but it's simply factually incorrect that they're "not accepted at most places anymore"

caskey

jgreg728 said:

We're not interested in an Amex partnership either lol. Mastercard all the way.

You understand that Mastercard isn't an issuing bank, right? It's a payment network. The Apple Card its a Mastercard currently. AMEX is both a network and an issuing bank. Even if the card continues to be a Mastercard, it will still need a bank like Chase or Wells Fargo to actually issue the card and service the accounts.

22july2013

Some Amex cards are credit cards, but most are charge cards. Big difference.

firelock

Banks better be careful, they don't want Apple to decide that they are too difficult to deal with and so start their own Apple Bank.

ApplePoor

When traveling around the world, AmEx is accepted at some of the major hotels and some of the top restaurants. Virtually no use in rural European or South American areas nor the seven countries of southern Africa we visited several years ago. Most of the airlines will take American Express for tickets.

So one really needs a VISA and/or a Mastercard to cover the bases when traveling. Also a debit card for local currency at  cash points.

Xed

darkvader said:

Good, because I see no value in having an American Express card.  They're not accepted most places any more, probably because their merchant fees are exorbitant.

They are accepted most places where credit transactions can be made, but MC still wins out as being accepted in the most places.

Xed

firelock said:

Banks better be careful, they don't want Apple to decide that they are too difficult to deal with and so start their own Apple Bank.

In terms of nomenclature, Apple Bank is already taken and has been since 1983. Plus, this being Apple they'd use some very generic term like Ledger or maybe even Bank.

Maybe Apple Bank will want to partner with Apple as their issuer.

https://www.applebank.com/about/get-to-know-us/history-vision

danox

firelock said:

Banks better be careful, they don't want Apple to decide that they are too difficult to deal with and so start their own Apple Bank.

Australian Banks are crying and Apple isn't even a financial institution, they should watch out because many people would do their banking/saving at a place where they can buy goods of value as a starting point and stay there, most 60% live day to day as it is. Amazon, or Costco for example could be a one stop location a large number of people would be ok with that right or wrong.

jbtuckr

I'm sure there's more to it, but why doesn't Apple just do it themselves? They certainly have the capital. 

Xed

jbtuckr said:

I'm sure there's more to it, but why doesn't Apple just do it themselves? They certainly have the capital. 

It's not impossible, obviously, but a financial institution and being a card issuer is a different beast and would be a different company altogether, even if fully funded by Apple.

There could also be some additional oversight from governing bodies because of how that union is formed, which could be a disadvantage to Apple, but I do agree that I Apple could do it and I'd like to see a fairly detailed explanation from Apple as to why they won't do it, if that's the case.

Starting a credit union may be an easier hurdle if they're going to go that route.

https://www.thebalancemoney.com/are-credit-union-credit-cards-better-4159895

macuserosu

caskey said:

jgreg728 said:

We're not interested in an Amex partnership either lol. Mastercard all the way.

You understand that Mastercard isn't an issuing bank, right? It's a payment network. The Apple Card its a Mastercard currently. AMEX is both a network and an issuing bank. Even if the card continues to be a Mastercard, it will still need a bank like Chase or Wells Fargo to actually issue the card and service the accounts.

You understand Apple is big enough it could purchase a small bank with ties to Master Card and do just fine?   They don’t need anything from anyone if they want to.  So if the relation lead to a bad user experience and softening profits, what do you think Apple could do?  Take it in house like they do with a lot of things.