I'd wager this is the holdout in expanding the AC beyond the US. Other potential banking partners are watching Goldman and so prudently staying on the sidelines.
I'd also wager that Goldman, with large losses, a big round of layoffs, and unprofitable Marcus business is getting cold feet on the savings account. Apple never provided a public update after the initial announcement and pulling the feature from the beta. I doubt they'd want to drag Goldman through the mud whilst they are in active negotiations.
There are likely two paths Apple is exploring. One would be renegotiating with Goldman to share in the AC losses. The other is looking for new partners for the AC and the savings account.
Finding new partners may be difficult if Apple insists on keeping the same terms, with no fees on anything, not on late/missed payments nor foreign purchases. Another factor is that the big retail banks (BofA, Chase, Wells, Citi) would be competing with themselves. So that would suggest a partnership with one of the online banks such as Discover, Ally, or even AmEx. Apple originally partnered with Discover for the Apple Cash card before switching to Green Dot, so it's not clear whether Discover would even want to be in the race.
Yep, after reading this isn't really a "loss" like we commonly think of it. This is an "accounting trick" type of loss where they "lose" money by putting it away to cover expenses that never happened. It's just a "loss" for tax purposes really. Click bait is gonna click bait.
8/22/24
3/09/25
@Lou-natic wrote:Yep, after reading this isn't really a "loss" like we commonly think of it. This is an "accounting trick" type of loss where they "lose" money by putting it away to cover expenses that never happened. It's just a "loss" for tax purposes really. Click bait is gonna click bait.
Considering that Goldman's consumer division is still not profitable, there is nothing to needed to lose for tax purposes. The AC is considered a sub-prime card and the only reason to do so is to enable more people to spend a lot of money on new Apple hardware.
Spend $1000+ on Apple hardware, receive an immediate 3% cash back, finance the rest on 0% APR. Apple realizes the profit, Goldman records the losses. Is there any wonder why no other bank is behind the AC? Only Goldman, who had no prior experience in the space.
@SeaProbe wrote:
@Lou-natic wrote:Yep, after reading this isn't really a "loss" like we commonly think of it. This is an "accounting trick" type of loss where they "lose" money by putting it away to cover expenses that never happened. It's just a "loss" for tax purposes really. Click bait is gonna click bait.
Considering that Goldman's consumer division is still not profitable, there is nothing to needed to lose for tax purposes. The AC is considered a sub-prime card and the only reason to do so is to enable more people to spend a lot of money on new Apple hardware.
Spend $1000+ on Apple hardware, receive an immediate 3% cash back, finance the rest on 0% APR. Apple realizes the profit, Goldman records the losses. Is there any wonder why no other bank is behind the AC? Only Goldman, who had no prior experience in the space.
App Store purchases too, if you spend money with the vast majority of apps, that's an Apple transaction too.
There's a ton of money sloshing around in the Apple ecosystem, I don't think GS is going to give up on this just yet.
