Apple will reportedly launch a credit card with Goldman Sachs | Hacker News Reader

Apple will reportedly launch a credit card with Goldman Sachs

theverge.com

60 pointspraveenweb40 comments

This is interesting because I was just exploring this idea around how all companies eventually just become banks. The example I was thinking about though was GE Capital. GE started out making stuff, then they became a bank. General Motors started out making cars, then they became a bank. Many more companies have venture arms which act like banks on a more intimate level. But still..

This makes sense as there are only so many macbooks, iphones, cars, generators, lightbulbs, etc.. to sell. Selling money is much much more lucrative.

Please name any bank thats more lucrative than Apple.

I have no idea why im beeing downvoted, im directly replying to the parent post which claims “This makes sense as there are only so many macbooks, iphones, cars, generators, lightbulbs, etc.. to sell. Selling money is much much more lucrative.”

Im pretty sure, that no bank is in the same profit/lucrative league as Apple.

While your point may or may not be correct, it was probably the tone of the comment rather than the substance that people are responding to

Point in fact: Braeburn Capital which is one of the largest hedge fund (if not largest outright) in the world by assets under management.

Braeburn Capital is owned/created/run by Apple.

Btw. A Hedgefund is not a bank.

Agreeing with your point - Apple also owns the worlds largest hedge fund.

Maybe its when they realize that in order to continue to grab deeper market share they need to optimize how their business is impacted by consumer's access to credit?

The problem seems to fit because younger companies' concerns are about how their business is impacted according to consumers access to their product. Apple is almost everywhere here in the states. What else could be preventing other consumers/holdouts from accessing Apple's premier products?

That's a good point. It would definitely remove the "I can't buy your product because I can't get credit for it" excuse which would open up a good chunk of a market. However I can't really see why Apple would want to "reach down" in terms of market demographics when looking at people with access to money. I would imagine they want to continue to reach "up" into markets with more and more money.

With the release of the iPhone X I perceived Apple as trying to reach "up" rather than "down". Your point definitely explains this move if that is what Apple are trying to accomplish.

Did not they already have Apple Pay to deal with money?

GE divested GE Capital.

https://www.ft.com/content/a6b02fae-5051-11e6-8172-e39ecd3b8...

A lot of companies have branded cards that are run by different companies. As far as I'm aware, most of them don't have any ownership stake in the companies that actually manage the credit card business.

It seems like Apple is changing from a Barclay's card to another company.

... which is now Marcus by Goldman Sachs

I was just looking this morning at the cards I have attached to Apple Pay. It was then that I noticed the new card-like graphics for Apple Pay, and there is language that makes "Apple Pay" sound an awful lot like a credit card. In the information section for Apple Pay there are things like "Card details", which lists it as "Discover Debit" with what looks to be a non-active PIN (it's all zeros). "Some stores may require a PIN to complete transactions with your Apple Pay Cash card."

Granted, it's all just verbiage, but Apple launching some kind of financial instrument wouldn't shock me.

People can send you money through iMessage and you can then use that money for payments at places that both support Apple Pay and take Discover.

FWIW it hasn't worked too well overseas. I tried it in Sweden and my "normal" credit card works but whatever vendor they were using at Pressbyrån did not like whatever setup Apple has (they took discover)

I hope that also means, that Apple Pay becomes truely available in central Europe. It is currently completely missing in Germany, and in France, while being availabe, it is only via less known banks. If Apple can't work out an agreement with the traditional big banks, having their own offering might help making Apple Pay available. (I have never understood why Apple Pay can't just charge the same credit card, the App Store uses)

Apple Pay can't just charge the credit card on file with iTunes because Apple doesn't actually store bare card numbers for Apple Pay payments. They use the card number you input to access the provider's network and get a token, which they then use to actually make transactions. The provider has to have agreed to integrate with Apple's systems to generate those tokens. They have a good write-up of how the system works here: https://support.apple.com/en-us/HT203027

Key part:

> Again, neither Apple nor your device sends your actual payment card number. Before they approve the payment, your bank, card issuer, or payment network can verify your payment information by checking the dynamic security code to make sure that it’s unique and tied to your device.

Apple Pay requires tight integration with the actual Provider of your card to authorize every transaction.

For contrast, Samsung Pay works by sending the bare card number to card-reader device by emulating magnetic fields. It's exactly as if you swiped the card, which is why it works with almost every card, and almost every card reader. It doesn't have any of the security benefits or guarantees of Apple/Android Pay, though.

I think you're both saying the same thing, though. If Apple makes their own credit card and has a tight relationship with Goldman, it's more likely that Apple will be able to "force" the card to be used with Apple Pay.

No disagreement from me here. I was just commenting on the mechanics of apple pay and why they can't just use the card on file with App/iTunes store.

> For contrast, Samsung Pay works by sending the bare card number to card-reader device by emulating magnetic fields. It's exactly as if you swiped the card, which is why it works with almost every card, and almost every card reader.

This is incorrect. Samsung Pay uses a tokenized PAN (credit card number) over both MST and NFC. It does not transmit the original bare card number. https://developer.samsung.com/tech-insights/pay/tokenization

Thanks for the correction!

Apple already have a credit card with Barclays (as mentioned in TFA). This is just them moving from one partner to another.

I wish Apple hadn't selected the Vampire Squid[0,1]. Are there any ethical financial services providers?

EDIT: Service providers at scale, I mean. It's a serious question. Would you trust Wells Fargo? Bank of America? These criminal organizations get a cut of nearly everyone's transactions. There needs to be an alternative, and it's too bad a company with the resources that Apple has can't or wont do better.

[0] https://www.rollingstone.com/politics/news/the-great-america... [1] https://www.forbes.com/sites/jakezamansky/2013/08/08/the-gre...

No, at a certain scale they’re more alike than not. GS is notably heinous because of their absurd scale, they’re not unique in terms of approach and ethics. At the scale Apple needs, all of the “good guys” were long since ground to chum; you don’t get that big in financial services, ethically.

On the contrary they have little or no presnece in the consumer area they only deals with institutions. It seems to me they are insignificant in this space.

Goldman Sachs has a consumer presence: https://www.marcus.com/us/en

This is GE capital, which they purchased for this purpose and seems to be the arm they’re using with Apple.

I realize this is a late reply. GE Capital was a loan organization. Marcus also offers checking and savings accounts, which were built in-house at Goldman Sachs. I interviewed for a job to work on the project.

Well yeah, they only got the license to get their hands on the bailout money [1]. They must think they're going to make some serious money off this, as they had no real appetite to get into retail any other way.

[1] https://www.theguardian.com/business/2008/sep/23/morganstanl...

I used to have a final card. I wish I could have just been rolled over into this instead of having to sign up for another card.

GS has been pushing hard into retail banking and is also trying to repair their brand perception.

Bad idea Apple. The only reason many of us use credit cards is to collect points. Without the incentive of earning points to spend on flights and merchandise, why would I use your card?

If you are in Canada, you absolutely need to use 1 credit card to have a decent credit history. Not having a credit history or having a bad credit history means you won't be able to get a mortgage, won't be able rent, won't be able to finance/lease a car. I'm pretty sure it works the same in US as well.

Yes, but you may as well choose the credit card with the most advantageous reward scheme. The fact that you need a credit card to establish history doesn’t make reasonable to choose a card with suboptimal rewards.

But the parent clearly says "The only reason many of us use credit cards is to collect points". Unless, of course only reason means something else.

Here's my anecdotal experience in the US. You can still find banks that will do manual underwriting for big loans like a mortgage. 15-ish years ago when I had no credit history I was able to rent an apartment, but I had to leave a bigger deposit, 3 months instead of the standard 2. I bought a car with no credit, but I bought it at a small buy here pay here lot whose customers often have bad credit. I didn't try a big dealership for a new car.

It's obvious there will be some sort of incentive. Apple Pay currently gets bonus discounts for various online retailers. Like Amazon gives 5% back on Amazon/Whole Foods purchases, expect Apple to do something as well.

The only reason many of us use credit cards is to collect points.

People who use their card for the benefits are the least profitable customers for a credit card company. Apple won't want you to have their card. Apple will want people who'll buy an Apple product (or five Apple products...) that they can't easily afford. They won't be people who'll default or declare bankruptcy because that's not Apple's market. These people will get the card for the small-but-useful discount (low single digit percent) in the Apple store, and they'll pay their debt off over a couple of years before doing the same thing all over again.

These people are the perfect credit card customers. It will be insanely profitable for Apple.

This is yet another "Do people still watch TV? I don't even own a TV" type of disconnect.

https://www.creditcards.com/credit-card-news/average-credit-...

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