A Goldman Sachs rival pulled out of the Apple Card deal on fears it will be a money loser

CNBC ^ | May 28, 2019 | Hugh Son

[Swordmaker]

• The Apple Card’s consumer-friendly features make it harder for banks to make money on the product.
• Citigroup was in advanced negotiations with Apple for the card but pulled out amid doubts that it could earn an acceptable profit on the partnership, according to people with knowledge of the talks.
• “Dude, if that portfolio ever makes money, I’m buying you a beer,” an employee at the card department of a big bank texted a Goldman staffer.

The sniping began shortly after Apple unveiled its new credit card with Goldman Sachs.

In an elaborate presentation in March, Apple CEO Tim Cook revealed the biggest yet mash-up between the worlds of big tech and big finance, a card that supposedly reimagines consumers’ relationship with plastic. Rivals of the investment bank wasted no time taking shots at the deal.

“Dude, if that portfolio ever makes money, I’m buying you a beer,” an employee at the card department of a competitor texted a Goldman staffer.

[Swordmaker]

Obviously a single source news source and we are just a couple weeks out of from the start of Apple’s World Wide Developers’ Conference. Ergo, it’s FUD season! Happy Fear, Uncertainty, and Doubt time! It happens every time that Apple has a special event.

[Swordmaker]

It’s FUD Season for Apple. . . If you have any doubt here’s an article from CNBC claiming that Citibank pulled out of being a partner with Apple on the upcoming Apple Credit Card on fears it would make no money in advance of any announcement or even any real negotiations. The article is based on the ubiquitous and authoritave unnamed “people knowledgable with the talks”. We are just a week away from the beginning of Apple’s World Wide Developers’ Conference in June and FUD (Fear, Uncertainty, and Doubt) Season always starts two to three weeks prior to any major Apple event to attempt to force the value of Apple stock even further down than it already may be. —PING!

Apple CreditCard FUD Season Article Ping!

If you want on or off the Mac Ping List, Freepmail me.

[Swordmaker]

Thanks for the heads up.

[Yo-Yo]

If the card is such a potential money-loser for the banks, maybe I should look into getting one...

[Rio]

Apple web page about the card “coming this summer”

https://www.apple.com/apple-card/

[montag813]

How are “banks” still a thing?

[montag813]

How are “banks” still a thing?

[Swordmaker]

CNBC and the FUDsters were posting exactly the same kind of articles about ApplePay when it was about to be rolled out, trying to dissuade adopting stores and banks from taking it on. Now ApplePay is very lucrative for Apple and saves money for the banks and stores that have adopted it, and prevents fraud for the Apple users.

The Apple CreditCard isn’t really that much different from other credit cards except it will only have the owner’s name, but no CreditCard number, expiration date, signature line, or even the security code number anywhere on it. The main difference is the lack of fees for late and over limit charges but encourages the user to pay early instead of keeping a running balance by having lower interest for paying early. What you do give up is all the gimmicks like cash back and airline miles that litter the scenery of other credit cards.

[Yo-Yo]

What you do give up is all the gimmicks like cash back and airline miles that litter the scenery of other credit cards.

Thanks for the details. I would have bet my bottom dollar that an Apple Card would earn credits towards a new Apple device, similar to the way that the GM Credit Card earned points towards a new vehicle purchase.

[Swordmaker]

How are “banks” still a thing?

The disparity between the interest they pay and the interest the charge and the fees for services, plus the float time on money deposited, and the reserve on money deposited which allows them to literally create money out of the fiction that a dollar deposited is a dollar loaned, when in fact a dollar deposited allows ten or more imaginary book entry dollars to be loaned on the expectation that dollar will not be demanded back right away.

Banks are money making machines.

[roadcat]

If the card is such a potential money-loser for the banks, maybe I should look into getting one...

I think the banks are in trouble with plastic, especially with alternatives like Apple credit jumping into the fray. I'm seeing more and more restaurants posting notices on the wall imploring patrons to pay cash rather than credit cards, because of high fees on traditional bank credit cards that restaurants must pay. I always try to pay in cash, makes the restaurants happier. I may try Apple credit if terms are better for vendors than other cards. If many people switch, then greedy banks are in trouble.

[Jonty30]

Apple would have to back this one up itself, if it is going to try and undercut the banks as it has undercut everything itself.

That may be the intent, to cut the banks out entirely.

[BunnySlippers]

I trusted Steve, don’t trust Tim.