Apple and Goldman Sachs are working on a deal to wind down their Apple Card partnership, and Chase is the ideal partner to team with Apple, Mark Gurman writes for Bloomberg News.
Mark Gurman for Bloomberg News:
Between the engineering spending and losses on loans, the credit card was a disaster for Goldman’s balance sheet, contributing to billions of dollars in red ink… So Apple recently offered Goldman Sachs a deal to get out early. If Goldman accepts Apple’s overture, it’s likely to take more than a year for the partnership to wrap up…
[Apple Card] has millions of users and more than $10 billion worth of deposits in related savings accounts… [so] some of the banks that didn’t want to partner with Apple four years ago might be willing to reconsider today. The name that has been discussed publicly the most so far has been AmEx.
But the bank that probably makes more sense as Apple’s new partner is Chase, which already has a significant relationship with the iPhone maker… It offers credit cards that use the MasterCard network. That’s the same system that powers the Apple Card, meaning there’d be no need to switch to the Visa or American Express platforms.
The one component of Apple’s financial services portfolio that wouldn’t be a fit for Chase is its savings account. That product is touted as a high-yield account, with an annual rate of 4.15%… The savings account deposits could be sold and split up among banks willing to offer the same interest rates to Apple. And users of the accounts probably wouldn’t care or even notice, as long as they’re able to access their cash.
MacDailyNews Take: Users of Apple’s high-yield Savings accounts would, of course, also expect them to be FDIC-insured, which they would be if Apple decided to split up the accounts with a group of banks offering high interest rates.
Please help support MacDailyNews. Click or tap here to support our independent tech blog. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
With Goldman Sachs losing in excess of 4 BILLION dollars being Apple’s partner, I’m sure there’s a HUGE line of banks wanting to replace them.
While 4.1% is good – there is better out there. I dump all of my cash back from my Card into the Savings account, but transfer to my online bank’s savings on the 1st of every month.
I hate Chase, I dumped them years ago, if the interest rate continues to stagnate I’ll start looking for a better savings account.
Wasn’t Chase the bank whose tellers were encourages to create fake accounts for real customers as a way of goosing their numbers for their bosses? Honestly, with all the anti-consumer efforts by the big banks, I’m surprised more people haven’t moved to local (non-profit) credit unions.
That was Wells Fargo.
It’s been hard to tell who to praise or blame for the good, the bad, and the frustrating around Apple’s toe-dip into finance. “Apple is not a bank.” That’s what my friends in finance keep saying in response to me insisting, “Apple is interested in finance.”
My experience with ApplePay, AppleCash, the Apple CC, interest-free financing of Apple hardware, and recently the savings account is mostly positive. But there have been odd bottlenecks that have yet to be remedied.
ApplePay appears to have been a great success.
When I’m out and about and it’s not offered, vendors seem apologetic as if they know they should. As an Apple Evangelist for 35 years, it’s been more than blissful to see it become the standard as opposed to “we don’t intend to make a Mac version of our software.”
AppleCash is on the right track but needs to work with all portable devices, including those that don’t run iOS. Heck, it needs to at least run in the MacOS (as should ApplePay)! Regardless of AppleCash’s quality, it’s still second fiddle in market share to Venmo because the latter doesn’t discriminate.
The Apple CC for me has been a mixed bag.
The 0% financing, especially in this interest-rate environment, is fantastic. I’ve taken to financing everything I buy directly from Apple because how can you beat 12-24 months of 0% financing on a brand new MacBook Air, MacStudio, iPhone, or AppleWatch?
However, other than these purchases at the AppleStore online the card wouldn’t work anywhere else! For the first year or more, every time I tried to use it to buy concert or NFL tix, “security features” blocked the sale. I’d respond to texts, and chat boxes, but no matter what I did to prove it was me, the legitimate charges were blocked. I had to use another card to complete the purchase. No one at GS could tell me why this was happening or what I could do to remedy it.
GS chat box operators said they would “forward it to the research team who would get back to me in 2-3 weeks (!).” And when they finally did? All I got were boilerplate responses and rejections. I finally went into the iPhone app on a lark and generated another “Virtual Card Number.” For the first time since the issuance of the card well over a year prior, I was able to use it at other places online. But the fact that no one ever suggested this as a possible solution after lots of “support” from GS? Major ball drop.
Sadly, there were more to come.
Once my virtual card worked with other vendors, it made sense to request a credit line increase. CCs love it when you do this. I’ve never been turned down for one in decades. And yet, with a near-perfect credit rating of over 800, GS refused to raise my credit limit citing, “You have not used and paid enough of your Apple Card credit limit…” They made this determination with a history of me never having missed a payment on a MacStudio and an M2 MacBook Air fully financed and paid off. They made this determination with full access and knowledge of my Apple Savings account balance being far more than the $2400 still remaining from loyal AppleStore purchases.
🤷🏻♂️
So we use the card as expected generating sales for the AppleStore and then get turned down twice in a year (you’re supposed to wait 6 mos. between requests, so I did) for a credit line increase, even with a great credit rating?
🤷🏻♂️
I guess I’m a masochist because I finally contacted the “support” crew for the CC again to share that once I was finally able to use the card everywhere, I started using it with Uber. There’s this big deal that Apple touts regarding the 3% you get back from using the Apple CC at Uber. “But I’ve only been getting 1% back,” I typed. “Why is that?” Again, the “support” person over Messages said it looked like that was correct unless I used “ApplePay.” I said I could not use ApplePay because you have to store your card number with Uber and no financial transactions occur in the car. Again, it was sent to the research team and I finally received this:
“Goldman Sachs Bank USA has investigated your inquiry and determined that no error occurred on your transactions…”
It’s laughable, really. I just have lost my sense of humor with the process and total lack of real support and solutions.
Our bookkeeper and CPA don’t love the Apple CC because they don’t provide a QuickBooks file format to get the transactions into QB, like every other major CC does.
I’m still using it and like the concept of the Apple Savings account where all of my extra AppleCash and 1% back stuff goes. I haven’t tried to do much with it yet other than enjoy the 4.15% interest it’s earning. Fingers crossed?
While I realize that most of these bumbles are probably in the Goldman Sachs side of the partnership, it behooves Apple to solve them, especially if they are getting divorced.
My Costco Citibank card is pretty great. It’s easy to use, great rewards, and they have fought fraudulent charges on it and I’ve never lost a dime.
My hope is that Apple will be a bit more discriminating in the dating process as they figure out who might be a better suitor. I would suggest a prenup.