4 ms·

for people who just want a place to dump their paychecks and have a credit card attached, this looks like a win the bar is set pretty low right now, maybe peop

for people who just want a place to dump their paychecks and have a credit card attached, this looks like a win the bar is set pretty low right now, maybe people are just better off running daily expenses through a stable company that isn't a traditional bank

bsder 3y ago
I always wondered what would finally take down Apple. Now we know it will be a financial arm. Every normal company that gets into finance eventually pays the price. At some point, that nice, profitable finanical arm will go into distress and the company will attempt to bail it out with funds from other arms. This cycle will repeat until it either kills the company or the financial arm after it has sucked down more money than you can imagine. Westinghouse and GE are more recent ones, but the list goes much further back.
- Spivak 3y ago
  I think the fact that these are really Goldman Sachs accounts probably buys them some stability.
- wallstprog 3y ago
  Maybe, but the actual "bank" in this arrangement is Goldman Sachs, and they are one of the more established players in finance.
  - JumpCrisscross 3y ago
    > the actual "bank" in this arrangement is Goldman Sachs, and they are one of the more established players in finance Cupertino is also hosing Goldman in this relationship [1]. [1] https://9to5mac.com/2023/02/16/apple-card-future-goldmans-sachs-losses/ https://9to5mac.com/2023/02/16/apple-card-future-goldmans-sa...
    - shagie 3y ago
      That needs to be put into context of the cost to acquire a customer. https://en.wikipedia.org/wiki/Customer_acquisition_cost https://en.wikipedia.org/wiki/Customer_acquisition_cost Various sources: $80 https://askwonder.com/research/average-customer-acquisition-cost-bank-pays-acquire-credit-card-customer-i-m-fy512dtei https://askwonder.com/research/average-customer-acquisition-... > The short version is that it costs around $80 to acquire a customer who returns about $120 in profit. https://medium.com/unifimoney/changing-the-vicious-cycle-of-push-to-pull-in-customer-acquisition-6218c8644000 https://medium.com/unifimoney/changing-the-vicious-cycle-of-... > It costs on average around $200 to acquire a credit card customer in the US (up to and beyond $1,000 if they are affluent cards like MasterCard World Elite and Visa Infinite). https://runningwithmiles.boardingarea.com/apple-card-customer-acquisition-cost/ https://runningwithmiles.boardingarea.com/apple-card-custome... > The Apple Card doesn’t need any affiliates or marketing yet analysts say that this new card has a customer acquisition cost of $350 and will take several years for Goldman Sachs to turn a profit on it. --- So the corresponding part of that is "we spent a lot to get a lot of customers. If they remain loyal, then GS will have something quite profitable for a long time." Spending $350 per customer is more than the $200 mentioned... but also much less than the $1000 for high end cards (and the tales of Chase Sapphire Reserve).

bsder 3y ago

I always wondered what would finally take down Apple. Now we know it will be a financial arm. Every normal company that gets into finance eventually pays the price. At some point, that nice, profitable finanical arm will go into distress and the company will attempt to bail it out with funds from other arms. This cycle will repeat until it either kills the company or the financial arm after it has sucked down more money than you can imagine. Westinghouse and GE are more recent ones, but the list goes much further back.

Spivak 3y ago
I think the fact that these are really Goldman Sachs accounts probably buys them some stability.
wallstprog 3y ago
Maybe, but the actual "bank" in this arrangement is Goldman Sachs, and they are one of the more established players in finance.
- JumpCrisscross 3y ago
  > the actual "bank" in this arrangement is Goldman Sachs, and they are one of the more established players in finance Cupertino is also hosing Goldman in this relationship [1]. [1] https://9to5mac.com/2023/02/16/apple-card-future-goldmans-sachs-losses/ https://9to5mac.com/2023/02/16/apple-card-future-goldmans-sa...
  - shagie 3y ago
    That needs to be put into context of the cost to acquire a customer. https://en.wikipedia.org/wiki/Customer_acquisition_cost https://en.wikipedia.org/wiki/Customer_acquisition_cost Various sources: $80 https://askwonder.com/research/average-customer-acquisition-cost-bank-pays-acquire-credit-card-customer-i-m-fy512dtei https://askwonder.com/research/average-customer-acquisition-... > The short version is that it costs around $80 to acquire a customer who returns about $120 in profit. https://medium.com/unifimoney/changing-the-vicious-cycle-of-push-to-pull-in-customer-acquisition-6218c8644000 https://medium.com/unifimoney/changing-the-vicious-cycle-of-... > It costs on average around $200 to acquire a credit card customer in the US (up to and beyond $1,000 if they are affluent cards like MasterCard World Elite and Visa Infinite). https://runningwithmiles.boardingarea.com/apple-card-customer-acquisition-cost/ https://runningwithmiles.boardingarea.com/apple-card-custome... > The Apple Card doesn’t need any affiliates or marketing yet analysts say that this new card has a customer acquisition cost of $350 and will take several years for Goldman Sachs to turn a profit on it. --- So the corresponding part of that is "we spent a lot to get a lot of customers. If they remain loyal, then GS will have something quite profitable for a long time." Spending $350 per customer is more than the $200 mentioned... but also much less than the $1000 for high end cards (and the tales of Chase Sapphire Reserve).