William Gallagher
The investment bank Goldman Sachs has reminded financial analysts that it developed and is making all the decisions about Apple Card.
It's no secret that multinational financial business Goldman Sachs is the bank behind Apple Card, but the company wants to be clear that it's in charge. In a session with analysts during its legally-required financial earnings call, Goldman Sachs's Chief Financial Officer Stephen Scherr alluded to Apple's branding and advertising.
"I want to be really clear on this," Scherr told analyst Gerard Cassidy from RBC, "notwithstanding whoever lays claim to the creation of the card. There's only one institution that's making underwriting decisions, and that's Goldman Sachs."
"We have set targets and goals and objectives along with Apple as a good partner would," he continued, "and Apple is completely in the know as to sort of how we are going about these underwriting decisions."
"But the ultimate decision sits with us and so we calibrate, manage our risk and collections in the context of that. And so I think I just want to be really clear about that, it is the bank that renders underwriting decisions in that regard," he concluded.
It's known that Goldman Sachs has invested heavily on developing Apple Card — and spends $350 for every signup — but according to Business Insider, the company also delayed many other projects as it reassigned its engineers to the project.
The company's policies for determining credit limits has come under attack from politicians.
Charles Martin
Malcolm Owen
Christine McKee
Wesley Hilliard
51 Comments
Give me a break. Goldman may be making the “financial” aspect decision regarding the Apple Card. The app design, user interface, intuitive user experience and creative aspect of the app, is all Apple.
"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
Matt Taibbi, Rolling Stone Magazine, 2009
Yes, Goldman is the underwriter. They are effectively the backend processor and determine credit limits and (likely) handle customer service issues - all the back office aspects of the card. It is Apple's brand, customer and user experience though. I bet Apple gets a MUCH HIGHER % of the revenue than Goldman. Let's see Goldman try to launch a card on its own. It would be an epic failure. But Apple could swap Goldman out anytime with a number of different providers in 3 months
Also, this $350 estimated acquisition cost for each Apple Card user came from the idiot analyst at Nomura who has had a $230 price target on Apple until today. I bet the vast majority of signups are generated by people simply opening their Wallet app (aka. almost "free" customer acquisition)