Goldman Sachs exec says winning customer loyalty with Apple Card more important than profitability

The head of Apple Card partner Goldman Sachs' consumer banking business in an interview on Monday addressed concerns that the new credit card offering is not structured for maximum profitability, and implied customer engagement is more important than sheer financial gain.

Speaking at Business Insider's IGNITION: Transforming Finance event on Monday, Omer Ismail, who leads Goldman's Marcus division, said the fledgling online bank is using Apple Card's unique customer-first features to gain a toehold in a new market.

Unveiled at a special Apple event in March, Apple Card was created for a digital world, with iPhone-enabled NFC capabilities and unique tools to help users keep track of and manage their expenses. Interest rates offered by Goldman are not the most competitive, but connected features in Apple Wallet urge customers to pay off their balance before incurring debt.

A true Apple product, Apple Card also boasts suite of platform-specific features designed to ensure user privacy and security. For example, Goldman is disallowed from using customer data for external or internal advertising purposes beyond a slice of information for internal reporting.

Due to its unique set of features — lack of fees, encouragement to pay less interest, no access to customer data — Apple Card is believed to be less profitable for its backers than a traditional credit card. A report in May claimed worries over profits led Citigroup, and potentially other major banks, to withdraw from negotiations to partner with Apple on the new card scheme.

Ismail, however, believes the features presented by Apple Card are in both the bank's and the customers' best interests.

"When I think about Marcus overall, the idea that doing right by the customer means being less profitable is just not an idea we subscribe to," Ismail said. "If you do right by the customer, you're going to ultimately win their loyalty."

Launched five years ago, Marcus is a relative newcomer to the consumer finance segment. Goldman has rapidly built out the division's product lineup through a series of acquisitions that includes credit card firm Final, which laid the groundwork for the banking giant's first credit card offering in Apple Card.

Ismail notes Marcus lacks "legacy" business models and technology, suggesting a more streamlined outfit that can operate at a lower cost as compared to lumbering credit rivals. This agility, along with Marcus' eagerness to get a foot in the door, puts the Goldman division in good position to take on a project like Apple Card.

Apple Card is due for release this summer.

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42 Comments

Michael3357 27 comments · 8 Years

About 5 years ago

The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general. Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card. If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all. People and their mindless stupidity about credit cards.

MacPro 19834 comments · 18 Years

Michael3357 said:

The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general. Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card. If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all. People and their mindless stupidity about credit cards.

Use of a credit card doesn't have to be stupid. For the past 45 years, I've only used an Amex as a credit card (I have Visa and Master Card but rarely use them) and I've always paid off the balance in full at the end of every month. There are people like me that use credit cards as a convenient way to pay without incurring any interest rather than carry cash and I am happy to pay the annual fee for all the benefits ranging from insurance to fly miles. I am sure there are many like me. I am equally sure many like me are very interested in this card.

genovelle 1481 comments · 16 Years

Michael3357 said:

The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general. Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card. If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all. People and their mindless stupidity about credit cards.

Really? Credit cards provide convenience and access. There are millions of businesses that would have never made it off the ground with out the owners being able to leverage their cards when needed. The fact that these other companies have come out attacking the card as unprofitable and a bad business model is telling. The interest rates are just the beginning of the cost. They make a ton on fees that this card doesn’t charge.

gerard 83 comments · 11 Years

I love my Citicard. However as soon as this card is available I will be giving the Apple Card a go.

rollerskater 18 comments · 5 Years

Bring it on. Only time will tell whether it is good credit card or not. I like that they are offering a different angle and hope it fulfills some people needs for whom the existing options are not satisfying. Apple should also design an app for online dating.