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According to this article, Goldman-Sachs is paying Apple a considerable amount for the privilege of facilitating Apple Card, expects to lose money for a while,

According to this article, Goldman-Sachs is paying Apple a considerable amount for the privilege of facilitating Apple Card, expects to lose money for a while, but is confident it can make the deal profitable by employing brand-new technology. This suggests to me something highly intrusive. I cannot take Apple seriously on any privacy claims as they partner with GS and do things like develop iBeacon. https://9to5mac.com/2019/06/10/apple-card-goldman-comments/ https://9to5mac.com/2019/06/10/apple-card-goldman-comments/

stock_toaster 7y ago
They could be desiring data (even anonymized) to assist leading edge prediction of market trends (purchasing, interest, etc) immediately as they happen. In a world of algorithmic trading and futures speculation, perhaps that matters a great deal? It is goldman though after all, so you could be right!
- fauigerzigerk 7y ago
  The customer segment served by the intersection of Apple and Goldman seems awfully narrow. I'm not sure there's much in it when it comes to gauging wider market trends.
  - mieseratte 7y ago
    > I'm not sure there's much in it when it comes to gauging wider market trends. It's not about Apple customers AND Goldman Sachs customers, it's about consumer trends. Having access to millions of purchases as they happen is useful unto itself when it comes to market trends. In this day and age effectively anyone can get HFT hardware / software, but having that pipe of data is a real moat that your average shop cannot compete with.
    - lotsofpulp 7y ago
      That info has been available for a long time already to anyone who is willing to pay for it: https://www.gsam.com/content/gsam/global/en/market-insights/gsam-insights/quantinomics/credit-card-data.html https://www.gsam.com/content/gsam/global/en/market-insights/... The card networks can even receive data of exactly what is purchased at what price with level 3 data: https://www.bluepay.com/payment-processing/gateway/level-3/ https://www.bluepay.com/payment-processing/gateway/level-3/ I know staples.com reports it because it shows you everything purchased on the AmEx statement, and hotel stays will have check in/check out dates.
    - fauigerzigerk 7y ago
      I think you misunderstand what I'm saying. Goldman would be getting some data from Apple customers who were also using this Goldman issued credit card - hence "intersection". Is that a diverse enough customer segment to draw any wider conclusions beyond this particular group of people? It seems pretty narrow to me, but perhaps you are right that the data has some value regardless.
- sweeneyrod 7y ago
  We know from this case https://www.bloomberg.com/opinion/articles/2015-01-23/capital-one-fraud-researchers-may-also-have-done-some-fraud https://www.bloomberg.com/opinion/articles/2015-01-23/capita... of insider trading based on spending data at Capital One that such data would be extremely valuable. But it sounds like it would probably be illegal because merchants wouldn't agree to let their data be used like that.
  - lotsofpulp 7y ago
    I don’t see why merchants would have any choice, the payment networks hold the cards and they themselves sell it. https://www.bloomberg.com/news/articles/2018-08-30/google-and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales https://www.bloomberg.com/news/articles/2018-08-30/google-an...
    - sweeneyrod 7y ago
      Retailers may sell data (via payment networks) to Google so the latter can use it for their advertising business, but it seems (at least to Matt Levine in the article I linked) that they can't/won't sell it to hedge funds to trade on: > does that mean that Capital One was allowed to trade on this data for its own profit? Wouldn't that be amazing? Surely the answer is no: I assume that Capital One signed agreements with retailers (or rather, with Visa and MasterCard, which signed agreements with retailers) in which it promised not to disclose transaction data, or use it for nefarious purposes. If you think about it this makes sense. A retailer selling material non-public information to a hedge fund which then trades on it is essentially the same as them executing trades based on the data via the fund, which is obviously insider trading.
      - tomp 7y ago
        No, I don’t think that’s correct. “Selling” data is typically enough to make it “public” (i.e. it’s dissemination), after all most financial data isn’t available for free (e.g. stock prices).
        7y ago
- jcranberry 7y ago
  Sounds like trading on non public information and therefore insider trading to me.
  - howard941 7y ago
    Should you recheck this understanding in case you're leaving money on the table? Trade all you like in the US on NPI if you're not in fiduciary position w/r/t to the info holder and aren't picked out expressly in the rules as an insider. The classic example is the cabbie trading on NPI gleaned from his passengers' conversations. At least this is what I gleaned from securities law classes. IAAL but IANYL so take it for what it's worth.
    - jcranberry 7y ago
      You're right that my knowledge of insider trading isn't strong but according to sec.gov the following qualifies as insider trading: >Employees of law, banking, brokerage and printing firms who traded based on information they obtained in connection with providing services to the corporation whose securities they traded; Correct me if I'm wrong, but that sounds like this particular situation to me.
      - stock_toaster 7y ago
        In this case, I think the "services" they are providing in conjunction with this offering would be to MasterCard, Apple, and the cardholder, so I don't thing they would be constrained with regard to anything else for /this data/. Though, I think it really depends on the agreements between MasterCard and Apple, about what data would be considered "misappropriated" though (see sweeneyrod's link[1]). They still couldn't /legally/ trade on things like "companyX asked us for a loan, so let's buy/short/etc companyX before they announce it", as that would be servicing companyX directly, and they learned the information (about the loan) from that servicing. [1]: https://news.ycombinator.com/item?id=20729529 https://news.ycombinator.com/item?id=20729529
        jcranberry 7y ago
- xiphias2 7y ago
  If it can be done in a privacy preserving way, I'm all for Goldman profiting from it and making the market more efficient at the same time. Goldman has done much worse things than this.
lotsofpulp 7y ago
GS is the lender whom a credit card owner is asking to pay a merchant. Why would you not expect GS to have the transaction information? They are the ones paying the merchant at the request of the credit card owner. Not to mention card transaction data is already available for sale, and by the network owners, nevermind the banks! https://www.bloomberg.com/news/articles/2018-08-30/google-and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales https://www.bloomberg.com/news/articles/2018-08-30/google-an...
- erikpukinskis 7y ago
  I mean, what are the chances that Goldman doesn’t sell that info? It does seem odd for Apple to choose to hand that data over to the bank with the absolute least scruples. GS has made a name for themselves screwing their own customers. I would’ve hoped Apple would partner with a smaller bank that has something to gain, and then say something like “because we care about your privacy, we have partnered with Bank X to develop the first credit card with truly private transactions” or something like that. The fact that they just leak the data to the credit card industry is odd. With all their cash they could’ve bought a bank and issued the card themselves. Hopefully that’s their endgame.
  - lotsofpulp 7y ago
    Regardless of the bank and Apple’s privacy stance, MasterCard/Visa/Discover/AmEx would have the info anyway, and they can sell it too.
  - tim58 7y ago
    > “because we care about your privacy, we have partnered with Bank X to develop the first credit card with truly private transactions” It would have been awesome if Apple provided the lender and Visa/Mastercard/AMEX with a non-transferable license to use client/transaction data with Apple being the owner of the data.
    - jacksnipe 7y ago
      Couldn’t that still be the deal? Certainly Goldman is in a position to use this data for something profitable in-house that doesn’t seriously impact privacy at an individual level (there are probably valuable signals in the transaction data when it comes to algorithmic trading), and it seems out of step with their broader privacy strategy for Apple to give Goldman unfettered rights to use the data however they want.

stock_toaster 7y ago

They could be desiring data (even anonymized) to assist leading edge prediction of market trends (purchasing, interest, etc) immediately as they happen. In a world of algorithmic trading and futures speculation, perhaps that matters a great deal? It is goldman though after all, so you could be right!

fauigerzigerk 7y ago
The customer segment served by the intersection of Apple and Goldman seems awfully narrow. I'm not sure there's much in it when it comes to gauging wider market trends.
- mieseratte 7y ago
  > I'm not sure there's much in it when it comes to gauging wider market trends. It's not about Apple customers AND Goldman Sachs customers, it's about consumer trends. Having access to millions of purchases as they happen is useful unto itself when it comes to market trends. In this day and age effectively anyone can get HFT hardware / software, but having that pipe of data is a real moat that your average shop cannot compete with.
  - lotsofpulp 7y ago
    That info has been available for a long time already to anyone who is willing to pay for it: https://www.gsam.com/content/gsam/global/en/market-insights/gsam-insights/quantinomics/credit-card-data.html https://www.gsam.com/content/gsam/global/en/market-insights/... The card networks can even receive data of exactly what is purchased at what price with level 3 data: https://www.bluepay.com/payment-processing/gateway/level-3/ https://www.bluepay.com/payment-processing/gateway/level-3/ I know staples.com reports it because it shows you everything purchased on the AmEx statement, and hotel stays will have check in/check out dates.
  - fauigerzigerk 7y ago
    I think you misunderstand what I'm saying. Goldman would be getting some data from Apple customers who were also using this Goldman issued credit card - hence "intersection". Is that a diverse enough customer segment to draw any wider conclusions beyond this particular group of people? It seems pretty narrow to me, but perhaps you are right that the data has some value regardless.
sweeneyrod 7y ago
We know from this case https://www.bloomberg.com/opinion/articles/2015-01-23/capital-one-fraud-researchers-may-also-have-done-some-fraud https://www.bloomberg.com/opinion/articles/2015-01-23/capita... of insider trading based on spending data at Capital One that such data would be extremely valuable. But it sounds like it would probably be illegal because merchants wouldn't agree to let their data be used like that.
- lotsofpulp 7y ago
  I don’t see why merchants would have any choice, the payment networks hold the cards and they themselves sell it. https://www.bloomberg.com/news/articles/2018-08-30/google-and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales https://www.bloomberg.com/news/articles/2018-08-30/google-an...
  - sweeneyrod 7y ago
    Retailers may sell data (via payment networks) to Google so the latter can use it for their advertising business, but it seems (at least to Matt Levine in the article I linked) that they can't/won't sell it to hedge funds to trade on: > does that mean that Capital One was allowed to trade on this data for its own profit? Wouldn't that be amazing? Surely the answer is no: I assume that Capital One signed agreements with retailers (or rather, with Visa and MasterCard, which signed agreements with retailers) in which it promised not to disclose transaction data, or use it for nefarious purposes. If you think about it this makes sense. A retailer selling material non-public information to a hedge fund which then trades on it is essentially the same as them executing trades based on the data via the fund, which is obviously insider trading.
    - tomp 7y ago
      No, I don’t think that’s correct. “Selling” data is typically enough to make it “public” (i.e. it’s dissemination), after all most financial data isn’t available for free (e.g. stock prices).
      - 7y ago
jcranberry 7y ago
Sounds like trading on non public information and therefore insider trading to me.
- howard941 7y ago
  Should you recheck this understanding in case you're leaving money on the table? Trade all you like in the US on NPI if you're not in fiduciary position w/r/t to the info holder and aren't picked out expressly in the rules as an insider. The classic example is the cabbie trading on NPI gleaned from his passengers' conversations. At least this is what I gleaned from securities law classes. IAAL but IANYL so take it for what it's worth.
  - jcranberry 7y ago
    You're right that my knowledge of insider trading isn't strong but according to sec.gov the following qualifies as insider trading: >Employees of law, banking, brokerage and printing firms who traded based on information they obtained in connection with providing services to the corporation whose securities they traded; Correct me if I'm wrong, but that sounds like this particular situation to me.
    - stock_toaster 7y ago
      In this case, I think the "services" they are providing in conjunction with this offering would be to MasterCard, Apple, and the cardholder, so I don't thing they would be constrained with regard to anything else for /this data/. Though, I think it really depends on the agreements between MasterCard and Apple, about what data would be considered "misappropriated" though (see sweeneyrod's link[1]). They still couldn't /legally/ trade on things like "companyX asked us for a loan, so let's buy/short/etc companyX before they announce it", as that would be servicing companyX directly, and they learned the information (about the loan) from that servicing. [1]: https://news.ycombinator.com/item?id=20729529 https://news.ycombinator.com/item?id=20729529
      - jcranberry 7y ago
xiphias2 7y ago
If it can be done in a privacy preserving way, I'm all for Goldman profiting from it and making the market more efficient at the same time. Goldman has done much worse things than this.

lotsofpulp 7y ago

GS is the lender whom a credit card owner is asking to pay a merchant. Why would you not expect GS to have the transaction information? They are the ones paying the merchant at the request of the credit card owner. Not to mention card transaction data is already available for sale, and by the network owners, nevermind the banks! https://www.bloomberg.com/news/articles/2018-08-30/google-and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales https://www.bloomberg.com/news/articles/2018-08-30/google-an...

erikpukinskis 7y ago
I mean, what are the chances that Goldman doesn’t sell that info? It does seem odd for Apple to choose to hand that data over to the bank with the absolute least scruples. GS has made a name for themselves screwing their own customers. I would’ve hoped Apple would partner with a smaller bank that has something to gain, and then say something like “because we care about your privacy, we have partnered with Bank X to develop the first credit card with truly private transactions” or something like that. The fact that they just leak the data to the credit card industry is odd. With all their cash they could’ve bought a bank and issued the card themselves. Hopefully that’s their endgame.
- lotsofpulp 7y ago
  Regardless of the bank and Apple’s privacy stance, MasterCard/Visa/Discover/AmEx would have the info anyway, and they can sell it too.
- tim58 7y ago
  > “because we care about your privacy, we have partnered with Bank X to develop the first credit card with truly private transactions” It would have been awesome if Apple provided the lender and Visa/Mastercard/AMEX with a non-transferable license to use client/transaction data with Apple being the owner of the data.
  - jacksnipe 7y ago
    Couldn’t that still be the deal? Certainly Goldman is in a position to use this data for something profitable in-house that doesn’t seriously impact privacy at an individual level (there are probably valuable signals in the transaction data when it comes to algorithmic trading), and it seems out of step with their broader privacy strategy for Apple to give Goldman unfettered rights to use the data however they want.