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Amex to takeover Apple credit card from Goldman?

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Amex to takeover Apple credit card from Goldman?

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Old Jul 3, 2023, 6:11 am
  #16  
 
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Originally Posted by emcampbe
Reading this. Hard for me to believe Amex would take over the card in its current form. Or, potentially any form that Apple will accept.

While negotiations may be going on, I'm assuming it's only a done deal when the papers are all signed. I suspect Apple won't want to make too many changes, and Amex will be demanding some changes (because why would they want to take over a product that a bank is losing millions of $ on without them). Not convinced there is a deal to be made here that can work for both.
Originally Posted by JackMackey
Them be some ugly numbers so not exactly sure what Amex has to gain.
Apple is trying to play the very long game for financial services - more transactions via Apple Pay, Buy Now / Pay Later, savings, etc, that both make them money directly and also make people buy more Apple products. So long term, they need appealing financial products. Banks like Goldman, Amex, etc just want to make money. Apple may find that what seems like a sweetheart deal it got with Goldman can't last permanently, so they may be willing to make a better offer to a new financial partner if necessary.
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Old Jul 6, 2023, 8:22 am
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I can't see Amex taking the Apple Card in its current form. The Apple Card is not profitable for Goldman and it isn't like Amex needs the card to bring in new cardholders. If they do take it, I suspect there will be wholesale changes to the card's structure, and probably not for the better for Apple Card holders
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Old Jul 6, 2023, 9:28 am
  #18  
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Originally Posted by Adelphos
Banks like Goldman, Amex, etc just want to make money. Apple may find that what seems like a sweetheart deal it got with Goldman can't last permanently, so they may be willing to make a better offer to a new financial partner if necessary.
I doubt there will be a "better offer" from another bank. More likely, GS will have to buy down the current deal so it can be sold.
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Old Jul 6, 2023, 9:47 am
  #19  
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Originally Posted by dayone
I doubt there will be a "better offer" from another bank. More likely, GS will have to buy down the current deal so it can be sold.
Exactly that. I think the current deal runs to 2029, so not much incentive for Apple to give up much at this point. If GS wants out, they're going to have to come up with some kind of sweetner for Apple to agree. But if GS has lost $1 billion on the partnership, they may be willing to pay a hefty sum to stop the bleeding.
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Old Jul 6, 2023, 12:58 pm
  #20  
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for supposedly smart money, Goldman was pretty dumb here. I never understood why they went for the lower-end consumer rather than the "aspirational" HENRY's (the amex plat types) where they could have significant cross-selling with wealth management.
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Old Jul 6, 2023, 2:27 pm
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Originally Posted by entropy
for supposedly smart money, Goldman was pretty dumb here. I never understood why they went for the lower-end consumer rather than the "aspirational" HENRY's (the amex plat types) where they could have significant cross-selling with wealth management.
A lot of HENRY's get Apple products too, but Apple, like AMAZON, has a broad base.

Your comment reminded me of 1-2 years ago when Chase was (rumor) looking to dump their Amazon card, which may or may not be profitable for JP MORGAN.

On a side note, I'm normally an Android/Windows/Linux guy who is also has 5 Amex cards. Does anyone think it would be worth applying, hoping that Amex takes over the portfolio, and starts offering MR points?
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Old Jul 6, 2023, 3:02 pm
  #22  
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Originally Posted by diesteldorf
On a side note, I'm normally an Android/Windows/Linux guy who is also has 5 Amex cards. Does anyone think it would be worth applying, hoping that Amex takes over the portfolio, and starts offering MR points?
I don’t have the card, but I also don’t know if I would qualify since I don’t have an iPhone either:

https://discussions.apple.com/thread/253034602
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Old Jul 6, 2023, 4:35 pm
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Originally Posted by diesteldorf
A lot of HENRY's get Apple products too, but Apple, like AMAZON, has a broad base.

Your comment reminded me of 1-2 years ago when Chase was (rumor) looking to dump their Amazon card, which may or may not be profitable for JP MORGAN.

On a side note, I'm normally an Android/Windows/Linux guy who is also has 5 Amex cards. Does anyone think it would be worth applying, hoping that Amex takes over the portfolio, and starts offering MR points?
That would be a shocking turn of events considering the Apple Card earns daily cash back and is funneled into a HYSA. I assume most people who signed up for the AC wanted cash back. I could see it becoming some version of the BCE card. 3% back on Apple products up to $6k a year. 2% back on something random like Apple Pay and 1% back on everything else. Eliminate the free FTFs. Incredibly unlikely they make it a MR earning card since most of those come with AFs. The ED card may as well not exist.
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Old Jul 6, 2023, 6:08 pm
  #24  
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The reason why the Apple Card is taking a bath is GS sucks at risk management (their defaults are staggeringly high). AMEX won’t be making rookie mistakes with a portfolio, they’ve been doing this for many years.

https://www.cnbc.com/2022/09/12/gold...e-problem.html
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Last edited by eponymous_coward; Jul 7, 2023 at 1:50 pm
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Old Jul 7, 2023, 11:43 am
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Originally Posted by eponymous_coward
The reason why the Apple Card is taking a bath is GS sucks at risk management (their defaults are staggeringly high). AMEX won’t be making rookie mistakes with a portfolio., they’ve been doing this for many years.

https://www.cnbc.com/2022/09/12/gold...e-problem.html
That's because they've been giving cards out to people with low credit scores and first time credit card applicants. Amex would almost certainly change the underwriting requirements if nothing else.
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Old Jul 7, 2023, 1:56 pm
  #26  
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Originally Posted by zorbachs
That's because they've been giving cards out to people with low credit scores and first time credit card applicants. Amex would almost certainly change the underwriting requirements if nothing else.
Bingo. AMEX could easily do a better job managing the portfolio and see better returns.

I don’t think it’s a lock that AMEX will take over, but they offer some significant no annual fee products in their portfolio (and I think there’s zero chance Apple would want their base Apple Card to be an annual fee product).

Something else to consider- AMEX captures the payment network rake that GS has to hand over to MasterCard… certainly there could be bad deals that AMEX would say “pass” to (Costco) but there could be a deal out there that would work for AMEX and not got GS…
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Old Jul 7, 2023, 3:40 pm
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Apple should buy a bank and issue it themselves. They could probably pick up the entire Marcus unit cheap.
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Old Jul 7, 2023, 4:18 pm
  #28  
 
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Originally Posted by murphy
Apple should buy a bank and issue it themselves. They could probably pick up the entire Marcus unit cheap.
I think Apple loves having the brand power to make others take their risk for them. Apple is learning a lot about what to do and not to do watching GS blow billions on their behalf. Apple seldom wants to compete in an existing product space. They want to redefine the problem space and present their product as the only solution to the problems they are trying to address.

I could see Apple doing another few years with another bank while they decide exactly what their bank and banking products should look like.
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Old Jul 8, 2023, 10:57 pm
  #29  
 
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Originally Posted by murphy
Apple should buy a bank and issue it themselves. They could probably pick up the entire Marcus unit cheap.
Apple has considered this many times. The most famous example of this for me was when GE Capital was king of the world, but currently banking rules don't make sense for a regular company to have a bank license anymore. So, it is not an option.

I actually think the government would prohibit Chase from having an exclusive with Apple, but I think such a deal would also drag down Chase.
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