Why would I want Goldman Sachs’ card in my Apple wallet?

From Apple, Goldman Sachs Team Up on Credit Card Paired With iPhone, posted Thursday on wsj.com:

Banks including JPMorgan Chase & Co. have spent heavily to lure cardholders with travel points, airport lounge access and other generous perks. Neither Apple nor Goldman is eager to join that race, people familiar with the project have said. Instead, the companies are betting that Apple customers will use the card because it is better integrated into the iPhone.

Engineers are working on new features for the Apple Wallet app that would encourage users to pay down their credit-card debt and manage their balances. Executives have discussed borrowing visual cues from Apple’s fitness-tracking app, where “rings” close as users hit daily exercise targets, and sending users notifications about their spending habits. There also could be notifications based on analysis of cardholders’ spending patterns, alerting them for example if they paid more than usual for groceries one week.

My take: Color me skeptical. I’m trying to cut my cards, not add more.

9 Comments

  1. David Emery said:

    Yeah, I’m with you on this, PED. Maybe this comes with “earn points towards Apple products,” but that’s not enough appeal to make me get one. (The affinity cards I have are for travel 🙂 )

    0
    February 21, 2019
  2. Ken Cheng said:

    If Apple is going to disrupt this space, they need to offer a low-interest card. Less than 10% will be a good start. I never carry a balance, but lots of people do. Maybe, get bonus points for not carrying a balance.

    2
    February 21, 2019
  3. Gregg Thurman said:

    If Apple is going to disrupt this space, they need to offer a low-interest card.

    I think the alliances Apple is making with the banking and cc industry are learning tools, preparing Apple for when it launches its own virtual (Apple Pay) cc card.

    Apple is making a profit, albeit a small one, collecting 0.0015% on each transaction. Imagine what happens when Apple Pay becomes more ubiquitous and it bypasses VISA, MasterCard, Discovery et al, lowers merchant and consumer fees, and making a net 0.05% (330X more than currently earned) on total transactions (lowering merchant fees by 1% while paying member banks the same as they currently earn from VISA, MasterCard, etc).

    Knowing that Apple Pay merchant fees are lower than VISA, MasterCard, etc., I see merchants asking consumers if they have Apple Pay and encouraging the consumer to use it.

    I believe this will happen before C2025.

    4
    February 21, 2019
    • Fred Stein said:

      I like the way you think. You may want to check your decimal points.

      More seriously, because of Apple’s security, and the demographic of their users, especially in the US, the losses due to default, fraud, and stolen credentials are much less. Apple reduces friction at the point of sale. Apple can monetize these advantages. And yeah, 2025? They’ll still be on ramping up phase. Not done.

      3
      February 21, 2019
      • Gregg Thurman said:

        Decimal points are OK. C2025 is still 5 years away and adoption of Apple Pay is accelerating. The number of Apple Pay users may still be growing, but the absolute numbers using it will be sufficient to take the plunge.

        Apple has more cash reserves right now than VISA and MasterCard have combined. What a great way to monetize Apple’s cash (>12% ROI vs current <1%).

        1
        February 21, 2019
        • Brian Loftus said:

          Apple gets $0.15 per $100 or .15%

          2
          February 22, 2019
          • Gregg Thurman said:

            Ah, shouldn’t have put a percent sign after .0015 or .05. Thank you for pointing that out.

            1
            February 22, 2019
  4. Gregg Thurman said:

    https://www.fool.com/investing/2019/02/21/apple-credit-card-rumors-resurface.aspx

    “Apple gets a cut of all Apple Pay transactions, in part because it created secure payment authentication protocols in Touch ID and Face ID that have helped combat fraud. When Apple Pay first launched years ago, this cut was reportedly 0.15% [same as 0.0015]. That was an unprecedented deal at the time, but it’s unclear whether or not the rate has changed. By launching a physical card, the tech titan would be entitled to a larger cut of fees, according to the report, helping to boost the services business that the company has been focusing so much on over the past two years.”

    Emphasis mine.

    0
    February 21, 2019

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