Apple Ends Apple Card Partnership with Goldman Sachs

<https://fortune.com/2023/11/28/apple-goldman-credit-card-exit-american-express-synchrony/>

No news as to whether or not someone else will pick up the Apple Card.

--
“If you are not an expert on a subject, then your opinions about it
really do matter less than the opinions of experts. It's not
indoctrination nor elitism. It's just that you don't know as much as
they do about the subject.”—Tin Foil Awards

On Wed, 29 Nov 2023 10:18:37 -0800, sms <scharf.steven@geemail.com>
wrote:

>Apple Ends Apple Card Partnership with Goldman Sachs
>
><https://fortune.com/2023/11/28/apple-goldman-credit-card-exit-american-express-synchrony/>
>
>No news as to whether or not someone else will pick up the Apple Card.

What happened to Apple's grand plans to expand the Apple Card to other
countries?

Over four years after launching, it's still only available in the USA.
With Goldman Sachs not happy with the arrangement with Apple the whole
project doesn't look like it's been that successful.

On 11/30/2023 2:06 AM, Chris in Makati wrote:

<snip>

> What happened to Apple's grand plans to expand the Apple Card to other
> countries?
>
> Over four years after launching, it's still only available in the USA.
> With Goldman Sachs not happy with the arrangement with Apple the whole
> project doesn't look like it's been that successful.

The Apple Card didn't appeal to high-value consumers because the
benefits were pretty lousy compared to other U.S. credit cards. They
handed them out to people with poor or no credit so losses were high.

Those that did obtain an Apple Card Mastercard often used them only for
0% financing purchases from Apple and used a card with better benefits
for other purchases. Since you couldn't use the Apple Card at Costco
(which only takes Visa in the U.S.) most people used a different card
for their mobile wallet on their phone. I.e. I use a card with 3% back
on mobile wallet purchases at Costco, and I go to Costco a lot.

Goldman Sachs/Apple could not get many merchants to subsidize an extra
1% cash back so the number of businesses that gave 3% back was very
limited (and I know that one franchise business that was really upset
about having to give up another 1% and stopped taking all mobile wallet
payments for a while).

Goldman Sachs/Apple recently they dropped one of the biggest benefits of
the Apple Card, 24 month interest-free financing on unlocked iPhones,
now requiring that they be activated at time of purchase with a postpaid
carrier (i.e. AT&T, T-Mobile, or Verizon). Not sure if it was Apple or
Goldman Sachs that was subsidizing that 0% financing.

If I were choosing a no annual fee credit card to use for a phone
purchase, and for service, I'd choose the Wells Fargo Active Cash Card.
$200 introductory bonus after $500 spending in three months, 2% cash
back, 15 month interest-free financing, and cell phone protection
(eliminating the need for AppleCare+).

It'll be interesting to see what bank, if any, takes over the Apple
Card, and what the benefits will be. They'll be extremely careful given
the losses that Goldman Sachs incurred. Hopefully any replacement will
be a Visa card.

Did the Apple Card actually result in many more sales of Apple products?
If so, then Apple would be happy to subsidize any losses incurred by the
bank that issues the Apple Card.

--
“If you are not an expert on a subject, then your opinions about it
really do matter less than the opinions of experts. It's not
indoctrination nor elitism. It's just that you don't know as much as
they do about the subject.”—Tin Foil Awards

On 2023-11-30 10:06:23 +0000, Chris in Makati said:
> On Wed, 29 Nov 2023 10:18:37 -0800, sms <scharf.steven@geemail.com>
> wrote:
>>
>> Apple Ends Apple Card Partnership with Goldman Sachs
>>
>> <https://fortune.com/2023/11/28/apple-goldman-credit-card-exit-american-express-synchrony/>
>>
>>
>> No news as to whether or not someone else will pick up the Apple Card.
>
> What happened to Apple's grand plans to expand the Apple Card to other
> countries?
>
> Over four years after launching, it's still only available in the USA.
> With Goldman Sachs not happy with the arrangement with Apple the whole
> project doesn't look like it's been that successful.

It has been successful for Apple. Rumours say it has been less
successful for Goldman Sachs (even possibly making a loss).

There were sketchy rumours a while back about Apple wanting to bring
the whole thing in-house.

On 2023-11-29 13:18, sms wrote:
> Apple Ends Apple Card Partnership with Goldman Sachs
>
> <https://fortune.com/2023/11/28/apple-goldman-credit-card-exit-american-express-synchrony/>

It was a money loser for GS.

--
“Markets can remain irrational longer than your can remain solvent.”
- John Maynard Keynes.

On 2023-11-29 13:18, sms wrote:
> Apple Ends Apple Card Partnership with Goldman Sachs
>
> <https://fortune.com/2023/11/28/apple-goldman-credit-card-exit-american-express-synchrony/>
>
> No news as to whether or not someone else will pick up the Apple Card.

Sept 2022:

"Goldman’s loss rate on credit card loans is the worst among big U.S.
card issuers and “well above subprime lenders” at 2.93%, according to a
Sept. 6 note from JPMorgan.
More than a quarter of Goldman’s card loans have gone to customers with
FICO scores below 660, according to company filings. That could expose
the bank to higher losses if the economy experiences a downturn, as is
expected by many forecasters.
CEO David Solomon will likely face questions from directors about the
consumer business at a board meeting later this week, according to
people with knowledge of the matter."

So it's not so much "Apple" as GS getting terrible clients.

More at...

https://www.cnbc.com/2022/09/12/goldmans-gs-apple-card-business-has-a-surprising-subprime-problem.html

--
“Markets can remain irrational longer than your can remain solvent.”
- John Maynard Keynes.