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In my experience, giving a company more business (not to mention, straight up cash!) is seldom an FU :) The above article is kinda slim on why this is bad for
by xyzelement 3y ago
In my experience, giving a company more business (not to mention, straight up cash!) is seldom an FU :)
The above article is kinda slim on why this is bad for GS but the sense that I got from clicking one link down is that the concrete thing is their 'platform' business has not recouped its investment. As in, they paid a bunch of people, paid for a bunch of integrations, etc and aren't generating sufficient offsetting revenue. Given how cards and accounts work, I suspect the incremental margin on a given CUSTOMER is positive. So yes, I think they would be happy to get the merchant fees off of your increased Credit Card spending and to enjoy the spread between your 4.15% and whatever they invest in which presumably pays more.
- datavirtue 3y agoHopefully it's invested in some type of insurance company, and in that case the spread is likely 1%. I would think the investment would have to be a guaranteed return.
- xyzelement 3y agoNot sure why that's "hopefully" - if you like getting the rate GS pays you, you want it to be sustainable for them and therefore for you. In practice - I forget the details - but it works in the other direction. The bank sets the rate it pays YOU based on a combination of what it can make elsewhere and how badly they want to get your money to fund that investment. Unless GS is somehow forced by their deal with Apple to pay out more than they can make (I see no evidence of that in the article) you'd expect this is how they operate.