back to article Goldman sacked: Apple 'wants out' of credit card collab

The future of Apple's credit card offering has been thrown into limbo, as the iPhone giant apparently wants out of its collaboration with Goldman Sachs, issuer of the Apple Card. Cupertino has reportedly proposed bailing from its arrangement with Goldman over the next 12 to 15 months, with the move severing the pair's entire …

  1. JWLong

    More BS

    "Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives," an Apple representative told CNBC. "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."

    Focused on thieving more $ anywhere they can.

  2. IGotOut Silver badge

    I just don't get ..

    Why people get these sorts of cards.

    They usually have higher interest rates, worst "bonuses" (unless very specific) and worst penalty clauses, such as late payments.

    1. aerogems Silver badge

      Re: I just don't get ..

      Because most people don't bother reading those details and just think, "Ohhh! Shiny new Apple thing! Gimmie! Gimmie! Gimmie!"

    2. ecarlseen

      Re: I just don't get ..

      Because Apple Card has very good terms and conditions, competitive interest rates and currency exchange rates, a great cash back program, no nusiance fees, separate card numbers for "card present" and online purchases (and you can the online card number via your app). It's not the absolute best card out there, but it's better than most.

      1. Charlie Clark Silver badge

        Re: I just don't get ..

        Ah, so another loss leader to atract customers.

      2. MachDiamond Silver badge

        Re: I just don't get ..

        "It's not the absolute best card out there, but it's better than most."

        The last time I looked at the fine print, the interest rate bracket was way up towards the high end. The default rate was over 30% and there didn't seem to be any good reason to have an Apple branded card. If I were traveling for business and being reimbursed, maybe I'd earn enough points to buy a new charging cable each year.

        1. katrinab Silver badge
          Gimp

          Re: I just don't get ..

          If you are looking for a spending or travel card that you pay off in full every month, then the interest rate isn't really that important because you will never pay it.

    3. doublelayer Silver badge

      Re: I just don't get ..

      In my case, I don't care whatsoever about the interest rate or penalties as I don't pay them. I use a credit card effectively as a debit card; I need some method of transferring money and I can't send cash over the internet, so that card works. When you take these away, picking a credit card just comes down to whatever incentives or typical usage fees there are. It's possible that Apple's has some benefit that people either want to use or think they will.

    4. Anonymous Coward
      Anonymous Coward

      Re: I just don't get ..

      Because Tim Cook has declared that it is good for me, duh !

    5. DS999 Silver badge

      Re: I just don't get ..

      It has 2% cashback on purchases via Apple Pay, and its deposited daily which is better than any competitive card. It is only 1% for "normal" purchases so I have another card that gives me 2% for non Apple Pay purchases, plus an Amazon card I use exclusively with Amazon since it gives me 5% on purchases there. Then there's the business card I got solely because it had a $900 cashback incentive if you spend $6000 in six months, which isn't all that hard to do. That's something I can't figure out - how in the world can that ever be a money maker for them? I half expected they would find a reason why I wouldn't get the money, but a couple months after the six months were up and well over $6000 in purchases I got a statement credit for $900...

      The Apple Card is also quite consumer friendly, without any of the stupid fees for stuff like late payments. Something Apple insisted on, and probably limits their choice of alternatives to Goldman Sachs in the future.

      1. David Hicklin Bronze badge

        Re: I just don't get ..

        > how in the world can that ever be a money maker for them?

        Because enough people will run up big balances, not pay them off each month as get charged lots of £££/$$$ in interest

        Net everyone is as savvy as me or you, or other forum users here....

  3. aerogems Silver badge

    Given Apple has literally billions in the bank, I'm surprised they don't just transfer some of that to their newly spun up financial arm as seed capitol and cut out companies like Goldman completely. Make a deal direct with MasterCard or Visa or other. It's no secret Apple wants to slowly transition from being a device maker to a financial services company and they have the resources necessary to just acquire the talent needed to do this sort of thing in-house if they wanted. Maybe they figured they'd watch how Goldman does it and then copy it little by little, phasing Goldman out over time, but then realized either Goldman has no idea what they're doing either, or that there wasn't as much to it as they initially thought.

    1. Orv Silver badge

      Banks work under all kinds of regulations Apple probably doesn't want to deal with.

    2. DS999 Silver badge

      They don't want to be regulated like a bank

      That would be a huge pain in the ass for a giant company that does banking as a tiny little sideline, rather than its main business.

      Now if those regulations would allow Apple to create a separate company to be "Apple Bank" or whatever then they certainly have the money to make that happen. The regulators may not consider it as a separate company if Apple owns or controls it, but if they made it truly independent it would have shareholders who will want to make money and be pushing for unfriendly practices Apple doesn't want like charging late fees and excessive interest rates. Maybe they could incorporate it as a credit union, which is sort of a non profit version of a bank...

      I'm sure Apple has had people looking into this for a while now. If they were smart they started looking into it before the ink was dry with Goldman Sachs, as a "just in case". Maybe they can turn that around in the 12 months or whatever until they leave Goldman. Either that or they have someone else lined up, I can't imagine they'd be willing to end the contract before its official end date of 2026 without a solid plan in place.

    3. NeilPost Silver badge

      Just buying their way in via one of the more agile Digital First Global FinTech’s is like Revolut or maybe Starling or Monzo would be my suggestion.

      Also a Payment Provider to make them independent too.

    4. Charlie Clark Silver badge

      For a while Google was threatened with being regulated as a bank because it was so cash rich.

      1. DS999 Silver badge

        You don't get regulated like a bank for having a lot of cash. They had probably tread too close to being a bank at some point - they've dabbled on the edges of the sector for a long time. I remember "Google Checkout" from almost 20 years trying to compete with Paypal, maybe they wanted to let consumers deposit money with them rather than having it use their bank account or card and they were warned they would be regulated as a bank (as they should) if they went forward with that plan so they backed off.

        Paypal does maintain deposits for consumers (sort of) but has a linked bank account or card, and it has avoided being regulated as a bank but it has had to fight battles with regulators for years to avoid it.

        If just having "too much cash" was enough to trigger bank regulation then all of the major Silicon Valley companies would have been in danger in the previous decade.

        1. katrinab Silver badge

          In the EU, Paypal is regulated as an electronic money issuer. The difference between that and a bank is that it has to keep customer deposits in a ringfenced bank account and isn't allowed to lend them out.

  4. ChoHag Silver badge

    > Our partnerships with Apple and GM are long-term contracts, and we don't have the unilateral right to exit those partnerships

    This is how grown ups deal with unpleasant situations they got themselves into.

    > Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives

    This in public while you give your partner the middle finger in ... public somewhere else?, is not.

    Still, it might be fun to watch Apple find out what Old Money means.

    1. doublelayer Silver badge

      It sounds like they built in an escape hatch, Apple has activated it, and Goldman wasn't getting what they wanted from it so is probably happy enough with that. Building in an early end option is also professional if you do it at the point where you negotiate, rather than demanding one be added.

      1. DS999 Silver badge

        Yes there had been articles about Goldman being unhappy with the deal and wanting out, so even if there wasn't a built in escape hatch they are probably more than happy to let Apple out of the deal early.

        It always seemed like an odd partnership, a company that is almost 100% consumer focused with a company that has almost no focus whatsoever on consumers outside of the 1% of the 1%. Honestly I think both sides just liked the cachet of being associated with the other's brand.

  5. Philo T Farnsworth

    Nice hed.

    I have no opinion on the story in question. I just dropped in to doff my chapeau to El Reg's headline writer, whomever they may be.

    "Goldman sacked."

    Well played. Well played, indeed.

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