Citigroup Reportedly Passed on Apple Card Due to Profitability Concerns
Apple is set to launch its own credit card this summer in the United States in partnership with investment bank Goldman Sachs and Mastercard. The aptly named Apple Card will be built into the Wallet app on the iPhone, with a physical version available for use at stores that do not accept contactless payments.
Apple is aiming to shake up the credit card industry by collecting no fees whatsoever, offering one to three percent cash back paid out on a daily basis, and providing consumers with interactive features such as color-coded spending summaries in the Wallet app to assist with spending and budgeting.
Now, a report says those consumer-friendly plans led some other banks to ultimately pass over the Apple Card opportunity.
According to CNBC, Citigroup was in advanced negotiations with Apple over the card, but pulled out amid doubts that it could earn an acceptable profit on the partnership. The report claims that other banks, including J.P. Morgan Chase, Barclays, and Synchrony, also bid on the Apple Card business.
Goldman Sachs has an advantage over those other banks since it does not already offer its own consumer credit cards, so it does not have to worry about potentially cannibalizing one of its own businesses.
"Goldman Sachs seeks to disrupt consumer finance by putting the customer first. We are excited for customers to use Apple Card, which is designed to help people take control of their financial lives," a spokesperson for the bank told CNBC.
Apple Card support will likely be added in iOS 12.4, with some Apple employees already receiving their physical version of the card.
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Top Rated Comments
Like how Goldman put their Credit Default Swap customers first, when they stopped answering the phone when it came time for them to pay their customers' swaps, and even refusing to recognize the market price of those swaps that moved against them? Goldman only puts their customers first when it's profitable for them to do so. In other words, never.
Goldman: We can.
Citigroup: But how?
Goldman: Heh. Trust us.
Citigroup: [furtively checks back pocket for wallet] {gone} Hey Goldman, have you se-
/hears footsteps running away
I do wish they paid at least 1.5% cash back on physical card (non-Apple Pay) transactions, though. Chase gives me 1.5% cash back on everything, and Apple Pay acceptance is very hit or miss around here. Particularly restaurants tend to not take Apple Pay.