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Hm, what would this mean for Apple Card users? Would it be shut down? How about those who have Apple Savings Accounts?[0] [0] https://www.apple.com/newsroom/20

• arcdigital 3y ago
  I'm assuming it will be just like any other time a card portfolio is sold or transferred (Costco Card: Amex -> Citi, REI Card: US Bank -> Capital One, GM Card: Capital One -> Marcus (which is Goldman, ironically I think they want to get rid of this card too), etc...). Unless Apple discontinues the card completely, they will choose a new bank, that bank will take on the existing portfolio, everyone will get new cards (maybe numbers depending on how they did the BINs)...but with the physical card not having a visible number, the apple pay card being able to be automatically updated, and the virtual card's number being right there in the app it should be pretty painless. Since Apple manages the whole thing through their own app and not a Goldman Sachs app, it should be fairly seamless as everything should look the same and you won't need to make a new login or worry about how to start paying a new bank. If there's new cards to be issued it's likely it will just show up in the Wallet app and they'll mail you a new physical one. Last year Apple moved the Apple Cash card from Discover to Visa and most people didn't even know that happened. There was even a button to switch it over sooner if you wanted to. With the Savings Account I expect it will be similar as long as they can find a bank willing to offer a similar APY. Especially for people who just use it with the Apple Card and don't deposit directly to it using the routing/account number, you probably won't really notice. source: all speculation, but I have worked extensively in payments for years and have launched banking products.
  • toomuchtodo 3y ago
    Great benefits for Apple Card users to have Apple abstract all the drudgery away. Experience is the differentiator, back office is a commodity. What’s left is to make Apple Cash a deposit account with FedNow instant payment rails access. Buy a distressed regional bank to get a charter if needed. Every iPhone user then becomes a potential banking customer (136M US iPhone users, compared to 66M JPMC household customers, for example). Interchange revenue will slowly decline (again, FedNow), which Apple can compensate for with the deposit spread.
    • CydeWeys 3y ago
      There are lots of downsides to actually becoming a bank, though. It creates many restrictions on the kinds of things you can do, and unless it's the majority of your business, it's not something you want. Better to work with banks but not be a bank yourself.
      • toomuchtodo 3y ago
        I suppose it’s going to depend on how many willing partners are out there with an appetite to be beholden to Big Tech as the smaller partner with less leverage. Evolve just dumped a bunch of fintech partners over the last year (conversely, they were aggressive in who they were willing to partner with), and moving is not trivial. While Apple has deep pockets, I’m sure engineering time is better spent delighting users vs engineering around partner churning. https://fintechbusinessweekly.substack.com/p/evolves-problematic-partners-bankruptcies https://fintechbusinessweekly.substack.com/p/evolves-problem...
        • posguy 3y ago
          Depends if Apple really feels they can run a backoffice banking arm effectively and cheaper than a partner that is already at scale. Underwriting credit & customer risk, handling edge cases, maintaining relationships with ATM networks, card networks and ensuring compliance with state and federal banking rules is quite an undertaking. Goldman Sachs did not have scale like Chase, Capital One and others to create a diversified portfolio of clients, limiting their ability to hedge against the risks of a single platform or two dominating their involvement in this market. One bad software update by Apple could flood their support queues, and they can't afford to keep significant staff on hand to keep wait times below an hour (unlike a larger company, who is already staffed up to serve their non-Apple customers).
          • deleted 3y ago
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      • yellow_lead 3y ago
  • arcticbull 3y ago
    Minor nit: > Costco Card: Amex -> Visa Amex -> Citi. Amex was both the issuer and the network (they're vertically integrated, so to speak). The shift saw Citi become the issuer on the Visa network.
    • arcdigital 3y ago
      my bad! updated, I was thinking Citi but Visa came out after typing Amex right before. thanks!
  • hedgehog 3y ago
    I imagine they'll replace the physical cards as the existing ones have Goldman's name on the back. The transition could otherwise be nearly invisible, the Goldman name and actual card numbers don't show up often in normal usage.
    • nickthegreek 3y ago
      New card better have the same weight and feel! It’s what made me want to sign up if I am being perfectly honest. I mostly tap to pay but enjoy getting the card out every once in awhile.
      • TrueGeek 3y ago
        Ugh, please no! I think it’d be cooler if it was lighter and slimmer than other cards, not 4x as heavy.
  • delfinom 3y ago
    >Unless Apple discontinues the card completely, they will choose a new bank That's the problem. All other banks turned Apple away because Apple was demanding some significant concessions. Goldman agreed to them because at the same time they were trying to break into the consumer business. Apple will have to cave.
    • tehwebguy 3y ago
      That was before Apple had however many card customers they now have.
• parl_match 3y ago
  The rumor is that Apple Card will move to Amex. WSJ says 12-15 months, but AppleCard is contractually obligated to use the MC network until 2025. I can't imagine they'll close all those accounts, so likely we'll see some sort of migration leading up.
  • giobox 3y ago
    This would be a bit of a detractor for me, Amex is not as widely accepted, especially when traveling in Europe. Mastercard is accepted virtually everywhere in the EU and UK.
    • wdb 3y ago
      Yeah, I had an Amex card and it was pretty useless in Europe. Admittingly that was more than five years ago so maybe things have improved by now.
      • giobox 3y ago
        The fact the Apple card was a Mastercard and had no foreign transaction fees was largely the only reason I opened it, as I too find my Amex a pain in the ass in Europe. If it does become an Amex card, I will likely close the account.
        • ghaff 3y ago
          For me, Apple Card is mostly only interesting for the discount on Apple. I carry it as a backup otherwise but don't use it.
        • throwaway2037 3y ago
          no foreign transaction fees In an FX transaction, what is the difference between a trading fee and a wider spread? Nothing. (Why do people keep falling for this?) What you really want to see is a combined promise. For example: No fees, plus 1% or less FX spread on major currencies. (My preferred credit card promises that.) Honestly, it is very hard to pay a total of less than 1% on foreign transactions. Still, this is pretty cheap, given the convenience.
• deleted 3y ago
  [deleted]
• malwarebytess 3y ago
  I'm more interested in the savings account integration. I've found it super convenient. Too low APR for long term savings, but the convenience is worth the difference to me for short term savings parking. I keep $30K or so in it revolving for moving money around. Not to mention the cashback deposit right to the account.
  • herpdyderp 3y ago
    > Too low APR for long term savings What APR is your baseline for long term savings? I'm interested in where you see significantly higher APR savings accounts because the Apple Card Savings Account is 400x my previous savings account APR.
    • 3-cheese-sundae 3y ago
      As of this writing, Ally is still higher than Apple Savings account (4.25% APY vs 4.15% APY)
    • function_seven 3y ago
      It's way better than my previous savings account as well, but still about 0.5-0.75 points lower than a couple of CDs that I have. Not sure if that counts as significant or not, but I figure it adds up. Apple Savings: 4.15% CIT Bank 6-Mo CD: 4.88% CIT Bank 18-Mo CD: 4.5% I think?
    • jrockway 3y ago
      I don't have a savings account but buy CDs on a regular basis. For the next two years, I have something between 5% and 6% maturing every 3 months. Apple Card Savings is 4.15%. So you can definitely do better than the Apple Card, but to some extent you're paying bankers to do what I do manually every 3 months. (You just pay them in "spread"; they're buying the same CDs I am, but keeping some of the profits to themselves. And letting you withdraw the money whenever you want, not just when the underlying CD matures. I get only a small amount of interest on my "what if I get fired and need to eat for 3 months until the next CD matures?" fund, sitting in my checking account.) I never bother with actual savings accounts because in a year or two interest rates will be back down to 0.0000001% or whatever, in which case just holding the cash in my brokerage account is easier. (At least it gets swept into an overnight account that earns 0.0000015% interest! Wow!)
• tmpz22 3y ago
  I had the Uber credit card which at launch had something like 4% cashback at restaurants/bars/uber trips. Uber progressively slashed the benefits overtime to the point where it just had some generic 1% cashback. That was through Barclays and eventually they shipped me some vanilla master card with no benefits. I hope the Apple card doesn't follow a similar path.
  • ianhawes 3y ago
    Ah yes I remember the black Uber card. IIRC you got $50 annually for subscription services along with some other unheard of perks.
• paxys 3y ago
  They will find another bank to back them (hopefully Chase), and most customers won't realize the difference.
• astura 3y ago
  This is largely not a big deal - credit cards move to new servicers all the time, the customers are just transferred and you get a new card. In the last 10 years the Costco credit card used to be serviced by AMEX but now it's Citibank. Fidelity credit card moved from FIA Card Services (Bank of America subsidiary) to Elan Financial and became a Visa. The AARP credit card went from Chase to Barclays. Those are just off the top of my head.