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The bursting launch of Goldman Sachs' first credit card, in association with Apple, left a number of crucial questions, including the credit limit and the interest rate that the bank will offer to try to win a share of the market . Corrosively competitive market?
The Apple Card, which will be deployed this summer on the Mastercard network, is Goldman's first foray into credit cards. The ultimate impact on the financial results of the bank depends on the determination with which it will agree to a credit.
His personal finance platform, Marcus, founded in 2016, consisted to date in high-yield savings accounts, personal loans and digital financial planning tools – all as part of a strategy aimed at to attract stable low-cost funding and to diversify the bank's sources of financing. returned.
Marcus has currently accumulated $ 45 billion in deposits and $ 5 billion in consumer loans, which remains minimal compared to Goldman as a whole, with a balance sheet of $ 933 billion and a profit of $ 10.5 billion. last year.
At Apple's product launch ceremony on Monday, Tim Cook, general manager, said the Apple card would be the card's biggest innovation "in 50 years". David Solomon, CEO of Goldman Sachs, echoed the sentiment that "Apple Card is completely changing the credit card experience."
According to what we know about Apple Card up to now, however, it does not exhibit any features that distinguish it from what card issuers, card networks or fintech companies already offer – to the Exception of a smooth titanium card without a number. or the expiration date (when buying online, card users will need to access their account numbers from the digital wallet of their iPhone).
"They integrate all the unique solutions that already exist," said Kevin Morrison of Aite Group.
The basic credit offer – a combination of 2% cash back on all purchases and no annual, late or other fees – was "rare but not unique" in the industry, according to Brian Riley. , card analyst at Mercator Advisory.
The fact that the cash deposit is made available to the holders daily, rather than at the end of the month with other cards, is "interesting," said Riley, but he points out that a credit card account where fees rise to $ 20,000 a year, the rewards of an average day will be around $ 1.10. So the feature is "always in the so-what zone".
And he adds that consumers "already have four other cards in their wallet. You still have to compete with Citibank, Chase and the others. It will not be a walk in the park. "
Mr. Morrison agrees, "It's a question of what's already in your wallet. . . what will make me ask for this Apple card? I chose my other cards for a reason. "
The consumer appeal of the other two key features – improved privacy and security protection, and financial planning tools – also remains to be seen, as card networks have added many new security features in recent years. years and that financial planning is one of the areas most in demand innovation fintech. Goldman herself started working in this business by buying the start-up Clarity Money for an undisclosed amount last year.
advisable
But Apple has a long tradition of bringing together innovations originally developed by other manufacturers – from touchscreen phones to MP3 audio file players – in combinations with visual appeal, ease of use, reliability and safety make them dominant on the market. The question is whether the Apple card is such.
Apple has designed this product to entice consumers to make payments directly with their phone, with the help of Apple Pay. Indeed, Apple claims that the physical card is designed "for purchases in places where Apple Pay is not yet accepted" and that the direct use of the card, without Apple Pay, does not give the Only 1% of its cash back. And the card itself will not have a contactless chip. Therefore, contactless payments, which are deployed on a large scale in the United States this year, can only be done with the iPhone itself.
If that means that the Apple card will appeal to a niche audience at first, it may be suitable for Goldman Sachs. In his 2018 shareholder letter, Mr. Solomon said, "We are aware of the risk profile of our emerging consumer credit business and will remain attentive to the changing business cycle."
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