I don't know if there are statistics out but I would make a bet that AppleCard users have higher incomes and are smarter with their money than the average credit card consumer. This would be a loss in an industry that survives only on high interest rates charged when people f-up or don't pay their entire bill on time. The high-yield savings rate and instant cash back rewards loses these banks money when their customers are actually responsible by paying their bills on time and not spending beyond their means.
Being approved for an AppleCard is not evidence of being financially well-off or a better credit risk. GS financial statements shows a higher-than-industry-average default rate from the cardholders, actually in the range of sub-prime issuers.
What happened with Apple’s relationship with Barclays? I seem to remember using Barclays relationship with Apple to get interest free financing to purchase a couple of my earlier Macs and possibly iPads.
Perhaps partnering with a non-US based bank may make it easier to roll out support for Apple Card more globally.
Ultimately, shouldn’t we expect that Apple Card would be supported by multiple partners, similar to Mastercard and Visa?
You have made a common error by someone not familiar with the basics of the consumer credit card industry.
Mastercard and Visa aren't credit cards: they are payment networks. American Express is both a credit card company and a payment network.
Technically, the Apple Card is a Mastercard issued by Goldman Sachs USA, NA. It says so in the fine print of the service agreement that any Apple Cardholder accepted (by clicking "Accept"). In that way, it's similar to a VentureOne Mastercard issued by CapitalOne.
Barclays Bank would be the issuing bank. It's almost certain that Apple had discussions with Barclays Bank about the Apple Card (before it debuted) before Apple selected Goldman Sachs as a partner.
Apple would have to partner with banks from other countries to service customers in those areas. But those banks have to have a business in the country and follow the banking regulations of that country as well. It's not like an random American can apply for a JCB card (a Japanese card) or a UK card.
To have American cardholders, Apple needs to find a bank located in the USA (which would be subject to US consumer banking laws, not those of the UK, Japan, Nigeria, wherever.
Excellent insight and enlightenment. Thank you, You are correct, my exposure to credit card payment systems is solely as an end user. Barclays previous relationship with Apple lasted several years and was a benefit to me on a few occasions. That is why I was surprised when they were not part of the Apple Card deal.
Despite being a newbie when it comes to the credit card industry, I actually use credit cards extensively as a means to avoid carrying excessive cash. I never use debit cards. My go-to card has long been Discover because they have always had exceptional customer service when I’ve had to deal with them. But when I travel outside of the US, they have not been well supported so I have to carry either a Visa or Mastercard too. Perhaps I’d be better served with an Apple Card with it being a Mastercard and having some Apple related benefits.
The only other exposure I’ve had with credit cards is company issued credit cards. Things may have changed over time, but I recall that unlike Visa/Mastercard, American Express was often a struggle to use outside of the US, at least for some expenses. I’m curious whether the Apple Card is widely used for company issued credit cards? Speaking of Japan, at least in the late ‘90s, business travel there was a struggle with any credit card, regardless of the issuer or sovereignty of the issuer. Everything was cash-only, even hotels. Hopefully that’s improved.
For you and others who don't know how credit cards work, here's a basic explanation. When you visit a Merchant X and decide to pay with Credit Card A, they will swipe your card. Through a payment network (Visa, MC, AMEX, Discover, JCB, etc.) they will contact the card issuing bank. Customer wants to pay, authorize charge? If the payment is authorized, Credit Card issuing bank A pays the merchant (or technically the merchant's bank). Now Credit Card issuing bank A has paid for your purchase with their cash. From the service agreement, you are responsible for paying that debt back to Issuing Bank A. That's the agreement you signed with Issuing Bank A, the fine print you have never bothered to read. You don't owe Merchant X anything more, they got paid by Issuing Bank A. You OWE Credit Card Issuing Bank A, that's why you get a statement from them. To Bank A there's a liability associated with you as a creditor. That's why there are interest charges, late fees, etc.
And your credit score is partly related to that debt. Remember that a credit score is a numerical figure that represents the likeliness that you will pay your debts.
My credit score is around 825-830. That means that I have an extremely high chance that I will pay off my debts. Guess what? I haven't paid any credit card fees or interest in probably 25 years. I'm what the consumer credit industry calls a "deadbeat" -- someone who pays off their entire balance due immediately, generating no additional revenue.
Forget to make the required minimum payment? Credit card issuing bank will tell a credit reporting agency, "Hey, this guy is a slacker. He missed a payment" (it's called a derogatory). Credit agency sees this as recalculates a lower score: you are less likely to pay off your debts based on payment history.
When you use a debit card, the merchant's bank uses the payment network (Visa, Mastercard) to contact your personal bank. That's why a debit charge will hit your checking account immediately. Your bank looked at the authorization request and said, "Yes, our client has the funds for this transaction." This is why debit card transactions don't affect credit cards. There's nothing owed. You buy something and if the charge is authorized, you have less cash. There's no debt, you have fewer funds.
The Apple Card is a decent card to consider for international travel because it incurs no foreign transaction fees. Of course, there are other cards that predate the Apple Card that offer the same benefit. The Visa card issued by my credit union is one. There's also a MC card issued by CapitolOne that also waives foreign transaction fees. Some (but not all) of the American Express cards offer this benefit.
Things have changed. More of the world accepts credit cards including American Express (which was hard to use in the late 20th century). Also, policies for company related travel have changed. Compared to 20 years ago, it's far more common for companies to not issue company cards to employees. Employees who do travel for the company use their own credit cards and fill out expense reports to be reimbursed. There are modern ways to do this with apps and services (like Concur) to automate the expense reporting workflow.
As for Japan, yes, they accept credit cards more these days. All travel can be done with credit cards. They have also gone nuts for touchless payment. Initially it was JR's Suica card (an NFC touchless transit pass) that started the trend. More and more vendors started adding the Suica card as a payment option. Then it went crazy. This happened around 2005 with the invention of the pre-smartphone "osaifu keitai" (literally "wallet phone"). Now people could use their phones as transit passes, movie & event tickets, payment for convenience stores, etc. Eventually other transit agencies and companies launched payment cards (Tokyo Metro has their well accepted Pasmo card).
These days traveling in Japan, I can pay for most things with my phone using the Suica express transit pass or via a credit card linked to Apple Pay. You can even ride Kyoto buses with a Tokyo Metro Pasmo card. The USA is maybe ten years behind Japan in NFC contactless payment integration, especially when it comes to transit.
It's amazing how little many people know about the consumer credit world despite the fact that most daily transactions by Joe Consumer in the USA are transacted on credit cards. And yes, it's worth learning the basics. Consumer credit scores aren't just used for setting mortgage eligibility anymore. They are now used in an ever increasingly wide variety of applications. In the long run, having a higher credit score will save you money in interest payments for things like mortgages and vehicle loans even if you pay off your credit cards every month. Who wouldn't want to knock off $100 of their monthly mortgage payment? Over a thirty-year mortgage, that would be $36,000 in savings.
This is perhaps the best, most informative post on AI I've ever seen. *Thank you*. Concise, rings very true, carefully edited. I'm learning much from this thread, as when I saw the headline, my initial reaction was, "how the f can someone lose money on a credit card?" The conclusion I get on this particular topic (Apple/GS) is GS gave away a huge vig to Apple. Banks. Do. Not. Lose. Money. It is their mantra, and now they have buyer's remorse. My heart bleeds for GS, and my shoes are full of peanut butter.
I too like the Apple Card, but use it essentially only where the 3% bonus applies (eg Apple) and like it for the free finance of Apple products (looking at you, my new iPhone 15 Pro Max). Like Mpantone, I worked hard to get rid of my consumer debt. It has been hard, and for over a decade now, have had no credit card debt. I paid a *lot* of interest over the years, as when I was younger, I struggled to make ends meet. I shudder to think of the risks I took. However, my sole interest in bank cards and choices to use them now is to get back every dime I paid with their cash back bonuses. I get 4 digits a year back now (everything goes on a card, and I've even found a 1% cash back debit card for use when a greedy merchant tries to add the credit card fee at the PoS.) (And I do mean greedy - a car dealership (cough Ford cough) now tacks on a 3% "credit card fee" that was not disclosed until the after the service was rendered. I know for fact their credit card issuer does not charge the a 3% swipe fee, and yet they claim it is their fault. They even charge this 3% fee on their branded Ford "rewards credit card." F-them.) I track the bonus programs, use specific cards in "categories" and look for statement credit offers on things before I buy things I would buy anyway. It adds up, and these tangible rewards are worth the inconvenience compared to the simplicity of the Apple Card. My bank offers an unlimited, everywhere 2% visa card (it is my default on Apple Pay) and since I need to look at my bank information periodically, it saves a step over going through the wallet thingy on my phone. IOW, there's no real advantage to using the AC, so I just don't. And the spiffy Ti card they sent sits in a drawer, and never leaves the house, as 1% on a credit card is not competitive.
Thanks again for this post. Very informative and useful.
Consumer banking is one of the most heavily regulated industries. Apple has zero interest becoming a bank. If this weren't the case, Apple would have started a bank a long time ago (before they partnered with Barclay Bank for the Apple Card predecessor), decades ago.
This is also why many companies have divested their consumer loan divisions. And with each passing year, there are more banking regulations, not less.
Apple doesn't want consumer debt as a liability.
And as it turns out, neither does Goldman Sachs.
I'm highly skeptical that consumer banking regulations are any more of an obstacle than the wide range of other obstacles Apple faces across their product lineup. For example, I'll bet the challenges of navigating the patent minefield of the cellular landscape is significantly harder (and explains the challenges Apple has had making a competitive 5g modem). I'm sure entering the TV/movie production business was no walk in the park either, what with the various union contracts and entrenched players. Getting approval for health related features of the Watch is also a challenge, but Apple is up to the challenge. If somebody were to give a detailed explanation of the challenges of EUV, you'd likely conclude that's impossible, too. The bottom line is that if you want to create any competitive product in the modern economy it is going to be "hard" and you can always come up with a long list of costs and obstacles to explain why nothing is possible. Quitters never win.
I think it's quite possible that Apple will buy or start a bank on their own. I suspect the real issue with the GS partnership is that GS just doesn't have the long term vision and patience that Apple does. Apple was willing to run the App Store for a loss or at break even for a long time before turning a profit -- now 'services' are a huge profit center. I suspect Apple is perfectly happy to do the same thing with banking, realizing that once the volume is high enough and the business model refined enough, it will be profitable. And in the meantime, it creates more platform stickiness and customer good-will.
Apple isn't going to buy/start a bank. They've had plenty of opportunity (and cash) for the past 10-15 years. There are easier ways to make money. Hell, Apple would be better off selling life insurance than running a consumer bank.
They aren't going to buy or start a mobile network either.
"Hell, Apple would be better off selling life insurance than running a consumer bank."
It won’t be easy to replace GS, without changes in the structure of the relationship between Apple, and, the Lending Company. Apple , will have to be more flexible….
Objectively, the benefits of the Apple Card are extremely mediocre. There are lots of other cards that give, for example, much high cash back on other categories, up to 5%+.
No way Apple gets the demands they want this time.
Want to place a small side bet on that?
Goldman thought it was getting into consumer banking in a big way (with Apple Card and other moves at the time), then changed its mind completely when it realized (surprise!) that consumer banking involves dealing with direct customer support for cardholders. With a sponsored card, it also meant making a very large corporate customer happy, too. Especially a customer whose net annual income is ~ 9 times Goldman's.
Many years ago, Steve Jobs said that for Apple to win, Microsoft didn't necessarily have to lose. That doesn't seem to be the case with Apple and Goldman.
I'm another deadbeat ... I pay my card off. I doubt I've ever made Goldman a cent, which makes me quite content.
Unfortunately, too many Apple diehards seem to be like me. Being financially responsible has a downside, at least for those in the financial services business.
Someone like Synchrony will assume the Apple Card business and run it into the ground at the speed of a freight train.
Consumer banking is one of the most heavily regulated industries. Apple has zero interest becoming a bank. If this weren't the case, Apple would have started a bank a long time ago (before they partnered with Barclay Bank for the Apple Card predecessor), decades ago.
This is also why many companies have divested their consumer loan divisions. And with each passing year, there are more banking regulations, not less.
Apple doesn't want consumer debt as a liability.
And as it turns out, neither does Goldman Sachs.
I'm highly skeptical that consumer banking regulations are any more of an obstacle than the wide range of other obstacles Apple faces across their product lineup. For example, I'll bet the challenges of navigating the patent minefield of the cellular landscape is significantly harder (and explains the challenges Apple has had making a competitive 5g modem). I'm sure entering the TV/movie production business was no walk in the park either, what with the various union contracts and entrenched players. Getting approval for health related features of the Watch is also a challenge, but Apple is up to the challenge. If somebody were to give a detailed explanation of the challenges of EUV, you'd likely conclude that's impossible, too. The bottom line is that if you want to create any competitive product in the modern economy it is going to be "hard" and you can always come up with a long list of costs and obstacles to explain why nothing is possible. Quitters never win.
I think it's quite possible that Apple will buy or start a bank on their own. I suspect the real issue with the GS partnership is that GS just doesn't have the long term vision and patience that Apple does. Apple was willing to run the App Store for a loss or at break even for a long time before turning a profit -- now 'services' are a huge profit center. I suspect Apple is perfectly happy to do the same thing with banking, realizing that once the volume is high enough and the business model refined enough, it will be profitable. And in the meantime, it creates more platform stickiness and customer good-will.
Apple isn't going to buy/start a bank. They've had plenty of opportunity (and cash) for the past 10-15 years. There are easier ways to make money. Hell, Apple would be better off selling life insurance than running a consumer bank.
They aren't going to buy or start a mobile network either.
Apple had plenty of time, cash, and motivation to develop their own silicon for Macs. Some people predicted it -- or at least yearned for it -- for years. Many said it wouldn't happen because it's just sooo hard, or if they were going to do it they would have already done it, or that they don't have the scale to do it profitably, etc etc. And now, guess what, they did it.
ApplePay and AppleCard are very clear indicators that Apple is interested in participating in the market for financial services. Funny how so many people can't see what's right tin front of them.
Remember, Apple does not jump into every industry they dabble with. And they have abandoned some markets. How many iPod MP3 players do they sell today? XServe computers? AirPort wifi routers? Pippins?
There is a *LOT* of liability involved with consumer banking. So much so that Goldman Sachs themselves are bailing out of it (not just their Apple Card operations).
Is there a full-fledged Apple TV (i.e., with a large screen display) sitting in a lab somewhere in Cupertino? Probably. There are probably heaps of prototypes sitting in a warehouse earmarked to get recycled. Macbooks with cellular data modem chips?
Just because Apple can doesn't mean it will.
Apple's march to M-series SoCs and their liberation from Intel was pretty clear ages ago.
Remember that Apple faces many challenges concerning Apple Card. It's still a USA-only product. Their demands from their issuing bank partners is probably stifling their ability to expand to new markets because no one wants to make such great concessions. Look at what happened to GS.
One thing for sure, there will be more regulation in the consumer finance marketplace in ten years than today.
It will be interesting to see what happens to the Apple Card. I doubt any currently operating financial institution will agree to the same terms as Goldman Sachs did for the Apple Card launch. Too many concessions in revenue generating activities (late fees, interest, foreign transaction fees, etc.). Apple was fortunate to find a naive partner in Goldman Sachs (who were itching to dive into the consumer finance market five years ago). GS's exit will be a warning flag to other issuing banks about the perils of this particular setup.
Objectively, the benefits of the Apple Card are extremely mediocre. There are lots of other cards that give, for example, much high cash back on other categories, up to 5%+.
True. I even found 6% - a 1% bonus stacked on top of the Amazon/Chase 5% for some delayed delivery. The AC "benefit" seems to me to be a convenience factor (the apple wallet app) and 3% on Apple products with free finance. I'll bite (!) on that latter part, but the former is...meh.
All banks come with significant risk though so it should be run independently from Apple and a partnership would be easier/faster. They could always buy a controlling interest in a bank to gain leverage.
The most useful payment system to have is a wallet like Paypal/Venmo etc rather than a loan/credit system.
Having Apple Cash internationally as an alternative to a bank balance would be a good option for a lot of people and very low risk. If they are going to have a credit system, they need to start slowly and make sure they have profitable customers.
Apple isn't going to buy a bank for some of the same reasons Apple isn't going to buy Disney. Apple wants to work with a financial institution to administer a credit card operation for Apple's customers, following some Apple-ethos customer friendly practices. This service is intended to reinforce the Apple 'ecosystem,' which drives more customers to buy Apple hardware. That's the purpose of the Apple credit card. People spend a lot of money on Apple gear, why not give them a more positive experience by making available a non-predatory way to finance those purchases? Buying a bank would let Apple have full control over a credit card program, but it would also come with all of that bank's portfolio and business, which is a whole lot of something they have less than no interest in owning or operating.
Apple is now operating a film and TV production and distribution business, again in the interest of reinforcing the Apple ecosystem and driving customers to buy Apple hardware. Apple could write a check and buy Disney to gain access to their formidable studios, production companies and distribution systems, but that also comes with a whole portfolio of things that Apple has less than no interest in owning or operating. Apple does not want theme parks, cruise ships, or television networks, and they're not going to act like a venture capital firm that buys a company and liquidates all the parts they don't want in a fire sale. They're especially not going to do that to an iconic brand like Disney.
People really seem to latch on to these uncreative narratives more befitting of crappy movie franchise sequels. Apple is not going to risk the potential damage to its reputation by buying other people's problems in the form of a bank.
Consumer banking is one of the most heavily regulated industries. Apple has zero interest becoming a bank. If this weren't the case, Apple would have started a bank a long time ago (before they partnered with Barclay Bank for the Apple Card predecessor), decades ago.
This is also why many companies have divested their consumer loan divisions. And with each passing year, there are more banking regulations, not less.
Apple doesn't want consumer debt as a liability.
And as it turns out, neither does Goldman Sachs.
I'm highly skeptical that consumer banking regulations are any more of an obstacle than the wide range of other obstacles Apple faces across their product lineup. For example, I'll bet the challenges of navigating the patent minefield of the cellular landscape is significantly harder (and explains the challenges Apple has had making a competitive 5g modem). I'm sure entering the TV/movie production business was no walk in the park either, what with the various union contracts and entrenched players. Getting approval for health related features of the Watch is also a challenge, but Apple is up to the challenge. If somebody were to give a detailed explanation of the challenges of EUV, you'd likely conclude that's impossible, too. The bottom line is that if you want to create any competitive product in the modern economy it is going to be "hard" and you can always come up with a long list of costs and obstacles to explain why nothing is possible. Quitters never win.
I think it's quite possible that Apple will buy or start a bank on their own. I suspect the real issue with the GS partnership is that GS just doesn't have the long term vision and patience that Apple does. Apple was willing to run the App Store for a loss or at break even for a long time before turning a profit -- now 'services' are a huge profit center. I suspect Apple is perfectly happy to do the same thing with banking, realizing that once the volume is high enough and the business model refined enough, it will be profitable. And in the meantime, it creates more platform stickiness and customer good-will.
Apple isn't going to buy/start a bank. They've had plenty of opportunity (and cash) for the past 10-15 years. There are easier ways to make money. Hell, Apple would be better off selling life insurance than running a consumer bank.
They aren't going to buy or start a mobile network either.
Apple had plenty of time, cash, and motivation to develop their own silicon for Macs. Some people predicted it -- or at least yearned for it -- for years. Many said it wouldn't happen because it's just sooo hard, or if they were going to do it they would have already done it, or that they don't have the scale to do it profitably, etc etc. And now, guess what, they did it.
ApplePay and AppleCard are very clear indicators that Apple is interested in participating in the market for financial services. Funny how so many people can't see what's right tin front of them.
Apple making its own processors for Macs supports their core business, which is making computer hardware. Making their own processors improves their ability to design that hardware and set their own future development timeline, while dispensing with other people's problems, which was what they had to deal with when depending on Intel for processors.
Apple wants credit cards for its own customers to facilitate a positive experience for those customers while they buy Apple's products. They have absolutely no interest in managing a financial institution outside of that context. They will not be taking on other people's problems by buying a bank.
No way Apple gets the demands they want this time.
Goldman thought it was getting into consumer banking in a big way ... With a sponsored card, it also meant making a very large corporate customer happy, too. Especially a customer whose net annual income is ~ 9 times Goldman's.
That and $5 will get them a good (but not great) cup of coffee.
A lot of people attacked me (even personally!) for saying "Apple needs to think worldwide." Is there anything in that statement that merits personal attacks? And why didn't anyone attempt to answer my question?
You made a selfish and foolish comment. If I had said, as an American, no one else In the world should have modern, universal healthcare because the US doesn't have it, don't you think I'd sound like a complete asshole for suggesting that everyone else should suffer because a certain country has laws that make progress difficult in a certain area?
That's a fair point, but the reason I didn't see it that way because most of them were responding specifically to the worldwide aspect. none of them were commenting about the "dying in the US" aspect.
That is your assumption. The people who attacked you personally - It was entirely due to "dying in the US" aspect. Again - I am not saying that is the right justification, but it is what it is.
Other posts on practical challenges on launching the Apple card worldwide - You should not treat them as "attack" directed towards you. They are counter-arguments to your argument on worldwide launch being a necessary aspect of any product/service launch by Apple. This is a discussion forum, so arguments/counter-arguments are part of life. You have to expect that to be the case. If you don't like to see counter-arguments, then you should not make the argument in the first place.
Okay, so instead of responding to what they said, you think I should have responded to what they didn't say. I understand.
For those of us outside the USA who have been waiting for 4+ years for this service, with no hint of it arriving in our countries, we kinda hope the service will die in the USA. Apple needs to think worldwide, and not provide services to Americans only. How many other Apple services are available in the US only?
Which worldwide issuing bank works with every single country in the world?
Citi
Not even close. They are big, but not the biggest. They don't even a ground presence in half the world's countries.
You don’t need a ground presence to issue a credit card.
They are in most countries.
Besides, Apple does not need to worry about regulations, they just slap their name on any issuer. They can also use MBNA, a big white label credit card issuer.
1) You are missing the point even though your four letter comment suggested they are. They aren't in all countries, which is what your comment is claiming despite a lack of proof. But that's because there isn't a world credit card system in place. Even MS isn't even everywhere and they're the largest payment-processing corporation worldwide. To reiterate, each nation has regulations for an issuing bank, and while Citi can be present in the US and Canada, they do have to set up in each country to issue a card in those countries.
2) Apple doesn't have to worry about regulations? Just slap their name on it? Sure! Nothing illegal about that. 🙄
Apple is just a distributor, only the issuer (the bank) needs to be regulated.
And why didn't anyone attempt to answer my question?
I did, less than 30 minutes after you posted the question.
My guess is that he is imagining your well reasoned post as "attack" or "personal attack", not as a response to his post.
It’s funny that the OP posted something meant to be inflammatory and then claimed he was attacked even when his question was answered and other questions were asked to clarify how this would work. I don’t think he ever answered how this would work.
I completely understand G.S. not wanting every bill to be due on the 1st of the month. Imagine you're a retailer and all your customers come in on the 1st, leaving you with no customers days 2-30. It's unreasonable of Apple to have G.S. have to handle an onslaught of bills just one day of the month and not be willing to spread them out. As an Apple Card customer, I'd be fine having mine not be on the 1st, but Apple has never bothered to ask.
Then why did they sign the agreement? Was Apple holding a gun to their head? Apple Card is designed to help people pay off their debt, having a bill due on the 1st is easy to remember.
LOL, ever heard of auto-pay?!?
People living paycheck to paycheck don’t use autopay.
Comments
https://www.cnbc.com/2022/09/12/goldmans-gs-apple-card-business-has-a-surprising-subprime-problem.html
That indicates Apple Card owners are not smarter with their money, despite expectations from some readers here.
I too like the Apple Card, but use it essentially only where the 3% bonus applies (eg Apple) and like it for the free finance of Apple products (looking at you, my new iPhone 15 Pro Max). Like Mpantone, I worked hard to get rid of my consumer debt. It has been hard, and for over a decade now, have had no credit card debt. I paid a *lot* of interest over the years, as when I was younger, I struggled to make ends meet. I shudder to think of the risks I took. However, my sole interest in bank cards and choices to use them now is to get back every dime I paid with their cash back bonuses. I get 4 digits a year back now (everything goes on a card, and I've even found a 1% cash back debit card for use when a greedy merchant tries to add the credit card fee at the PoS.) (And I do mean greedy - a car dealership (cough Ford cough) now tacks on a 3% "credit card fee" that was not disclosed until the after the service was rendered. I know for fact their credit card issuer does not charge the a 3% swipe fee, and yet they claim it is their fault. They even charge this 3% fee on their branded Ford "rewards credit card." F-them.) I track the bonus programs, use specific cards in "categories" and look for statement credit offers on things before I buy things I would buy anyway. It adds up, and these tangible rewards are worth the inconvenience compared to the simplicity of the Apple Card. My bank offers an unlimited, everywhere 2% visa card (it is my default on Apple Pay) and since I need to look at my bank information periodically, it saves a step over going through the wallet thingy on my phone. IOW, there's no real advantage to using the AC, so I just don't. And the spiffy Ti card they sent sits in a drawer, and never leaves the house, as 1% on a credit card is not competitive.
Thanks again for this post. Very informative and useful.
"Hell, Apple would be better off selling life insurance than running a consumer bank."
Hey! The new AppleCare!
Care to name a large, commercial bank that isn't one?
Want to place a small side bet on that?
Goldman thought it was getting into consumer banking in a big way (with Apple Card and other moves at the time), then changed its mind completely when it realized (surprise!) that consumer banking involves dealing with direct customer support for cardholders. With a sponsored card, it also meant making a very large corporate customer happy, too. Especially a customer whose net annual income is ~ 9 times Goldman's.
I'm another deadbeat ... I pay my card off. I doubt I've ever made Goldman a cent, which makes me quite content.
Unfortunately, too many Apple diehards seem to be like me. Being financially responsible has a downside, at least for those in the financial services business.
Someone like Synchrony will assume the Apple Card business and run it into the ground at the speed of a freight train.
There is a *LOT* of liability involved with consumer banking. So much so that Goldman Sachs themselves are bailing out of it (not just their Apple Card operations).
Is there a full-fledged Apple TV (i.e., with a large screen display) sitting in a lab somewhere in Cupertino? Probably. There are probably heaps of prototypes sitting in a warehouse earmarked to get recycled. Macbooks with cellular data modem chips?
Just because Apple can doesn't mean it will.
Apple's march to M-series SoCs and their liberation from Intel was pretty clear ages ago.
Remember that Apple faces many challenges concerning Apple Card. It's still a USA-only product. Their demands from their issuing bank partners is probably stifling their ability to expand to new markets because no one wants to make such great concessions. Look at what happened to GS.
One thing for sure, there will be more regulation in the consumer finance marketplace in ten years than today.
It will be interesting to see what happens to the Apple Card. I doubt any currently operating financial institution will agree to the same terms as Goldman Sachs did for the Apple Card launch. Too many concessions in revenue generating activities (late fees, interest, foreign transaction fees, etc.). Apple was fortunate to find a naive partner in Goldman Sachs (who were itching to dive into the consumer finance market five years ago). GS's exit will be a warning flag to other issuing banks about the perils of this particular setup.
Apple is now operating a film and TV production and distribution business, again in the interest of reinforcing the Apple ecosystem and driving customers to buy Apple hardware. Apple could write a check and buy Disney to gain access to their formidable studios, production companies and distribution systems, but that also comes with a whole portfolio of things that Apple has less than no interest in owning or operating. Apple does not want theme parks, cruise ships, or television networks, and they're not going to act like a venture capital firm that buys a company and liquidates all the parts they don't want in a fire sale. They're especially not going to do that to an iconic brand like Disney.
People really seem to latch on to these uncreative narratives more befitting of crappy movie franchise sequels. Apple is not going to risk the potential damage to its reputation by buying other people's problems in the form of a bank.
Apple making its own processors for Macs supports their core business, which is making computer hardware. Making their own processors improves their ability to design that hardware and set their own future development timeline, while dispensing with other people's problems, which was what they had to deal with when depending on Intel for processors.
Apple wants credit cards for its own customers to facilitate a positive experience for those customers while they buy Apple's products. They have absolutely no interest in managing a financial institution outside of that context. They will not be taking on other people's problems by buying a bank.