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Goldman Sachs Wants to End Apple Partnership, American Express Might Take Over
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Apple could just buy a failing bank like JP Morgan and go it alone.
The clueless people ripping on Amex is laughable.
1) Their underwriting standards are no longer high. They give out their cards like candy. It isn't the 1980's anymore.
2) Amex acceptance is at well over 90% of the merchants available in the U.S, and most likely has a 99% acceptance rate at the most commonly used merchants. The card is for Americans only, so foreign acceptance rate is not really a concern for 99.9% of the cardholders.
3) Amex interchange rates are barely (if at all) higher than Visa Signature/Visa Infinite, and World Elite Mastercard fees.
4) You can either have an Amex Apple Card, or no Apple Card at all in the future. Your choice.
5) Goldman has failed at this card. Their customer service is atrocious (why I cancelled my card), and their technology has failed to keep up at times... Technology blackouts, etc. seem to have been more common than with other cards.
If Amex offers 1.5% back on non-Apple Pa purchases and 2% back on all other purchases and keeps the 0% financing on Apple Products, 99% of the people out there will be happy with that. If you hate it, close your card, you won't be missed.
1) Their underwriting standards are no longer high. They give out their cards like candy. It isn't the 1980's anymore.
2) Amex acceptance is at well over 90% of the merchants available in the U.S, and most likely has a 99% acceptance rate at the most commonly used merchants. The card is for Americans only, so foreign acceptance rate is not really a concern for 99.9% of the cardholders.
3) Amex interchange rates are barely (if at all) higher than Visa Signature/Visa Infinite, and World Elite Mastercard fees.
4) You can either have an Amex Apple Card, or no Apple Card at all in the future. Your choice.
5) Goldman has failed at this card. Their customer service is atrocious (why I cancelled my card), and their technology has failed to keep up at times... Technology blackouts, etc. seem to have been more common than with other cards.
If Amex offers 1.5% back on non-Apple Pa purchases and 2% back on all other purchases and keeps the 0% financing on Apple Products, 99% of the people out there will be happy with that. If you hate it, close your card, you won't be missed.
If only JP Morgan/Chase wasn't the #1 bank in assets year over year.
I beg to differ. Just because the card is offered in the US doesn’t mean those holders do not travel abroad. I do, and often. Amex is not as well accepted outside the US as Visa and Mastercard. And I do encounter merchants whom I buy from who do not take AMEX. 🤷🏽♂️
I pretty much only use my amex card for anything that isnt cash, never had any problems with them, what’s your objection?
Depends on location I guess, I travel quite a bit, havent really had much trouble with amex in Europe, Canada, or the Middle East, which are my typical destinations…
Apple has a lot of money, but not enough for that - the company has a market cap of 465B, Apple would likely need ~1T in cash for that acquisition. I also cant imagine regulators allowing such a purchase - JP Morgan is a massive bank, critical to global finance, and manages 3.1 *trillion* in assets (JP Morgan btw was famous for saying that it was more important to control money than have your own, that philosophy still lives on)
I also cant imagine Apple wanting to acquire a major investment bank handling that much in assets, that critical to the operations of global finance, and the 300,000 employees that would come with it (btw JP Morgan and Citi are the two largest employers in NYC, with a quarter million employees each in NYC, acquiring either even if it could would literally make Apple a NYC company not a Cupertino one functionally
)
Could they legally do that? What about the FCC and regulators? Surely that would be antitrust territory... right?
I just cancelled all my amex cards and account after 15+ years because their customer sucks.
But they aren’t products, they are services. They offer loan services, checking account services… but they aren’t products because they aren’t produced. They are actions performed on behalf or for the benefit of the customer for compensation. That is by definition a service and not a product.
They're both products and services. Banks use the terms interchangeably.
Personal banking | J.P. Morgan Private Bank U.S.
Our Client Service team reaches you on a personal level and manages your full J.P. Morgan relationship, looking at your entire financial picture to make banking more efficient and more focused on your needs.
privatebank.jpmorgan.com
Bank Products
FINRA provides essential information on bank products like savings accounts, CDs and money market accounts. Learn more and make informed financial decisions.
Banking 101: Banking Products and Services | Capital One
Banks are a place to safely keep your money. Learn different types of products and services banks provide—and even brush up on finance 101 terms.
Yes, but it's not easy to get a bank charter. It's a long process. For instance, Block (Square) first applied for a bank charter in 2017, was granted a conditional approval in early 2020, but didn't get fully approved until a year later. A 4-year process.
SoFi applied for a bank charter in 2017 too, but because it was taking so long, they took a "short cut" and bought a bank (Golden Pacific Bancorp) instead. I put short cut in parenthesis because it still took them 5 years.
SoFi's national bank charter widens door for fintechs
Larger fintech companies may see the Office of the Comptroller of the Currency's approval of SoFi's charter as a guidepost, but small and midsize fintechs might abstain from applying, policy and industry experts said.
www.spglobal.com
SoFi achieved its bank charter from the Office of the Comptroller of the Currency largely through its acquisition of then-Golden Pacific Bancorp, completed Feb. 2. That concluded a journey that started in 2017 with an application for an industrial loan company charter with the Federal Deposit Insurance Corp., a subsequent withdrawal and its 2020 application for a national bank charter. SoFi also got approval from the Federal Reserve to become a bank holding company.
And this is with both of the companys having people with strong finance backgrounds working for them. Block's (Square's) former CFO (Sarah Friar) worked at Goldman Sachs before joining Square. SoFi's CEO (Anthony Noto) also worked at Goldman Sachs.
I don't believe Apple has anyone with strong finance backgrounds working for the company which means they'll need to do a lot of hiring.
If Apple was to go this route, we're probably looking to the end of the decade until Apple gets approved for a bank charter and becomes a bank.
I don't think the Federal Communications Commission will care. Lawmakers and others is a different story.
That's why Apple (and fintechs) partered with a bank. It's much easier and less headaches.
No banking charter? No problem. Fintech companies team up with small-town banks
Partnerships between high-flying tech companies and traditional banks, many of them tiny by comparison, are a key force behind the financial technology boom.
www.latimes.com
Partnerships between high-flying tech companies and traditional banks, many of them tiny by comparison, are a key force behind the financial technology boom. Because virtually no tech companies have the license required to perform banking services, many of them partner with existing banks to offer a suite of services including checking accounts, credit cards and the back-end and regulatory work the tech companies aren’t equipped—or allowed—to handle.
Now, driven by the tech industry’s thirst to jump into finance, a new crop of businesses are looking to broker the connections between tech and banks. One such business is Cambr, a little-known division of an investment company called StoneCastle, which counts Square and other fintechs as customers. StoneCastle works with more than 800 small banks, spread across the country, ready to take and hold deposits from Silicon Valley start-ups such as Square.
What Cambr aims to offer tech companies is a ready-made strategy to accept deposits that they wouldn’t otherwise have the license to handle.
Here’s how it works: A tech company or start-up might give Cambr as much as $100 billion of customers’ cash, and could then ask the service to spread the money around to potentially hundreds of different financial institutions. A result of spreading out the deposits is that more of the fintech’s cash is insured under the Federal Deposit Insurance Corp.’s $250,000-per-account guarantee, offering more coverage than if the money were deposited at a single institution.
The partnership model, which has rapidly become the go-to for financial technology companies, does pose some risks for banks, particularly if fast-moving start-ups draw the ire of regulators, as has happened before.
[ . . . ]
While the partnerships have injected cash into many small banks, some industry watchers have wondered if those banks could be left in a lurch if fintechs eventually got their own banking charters. If they did, community banks could find themselves as direct competitors to tech companies, without the same digital capabilities.
But so far tech companies have made scant progress toward winning banking charters, particularly as government concern over digital financial services has grown. Some members of the U.S. Federal Reserve have voiced concern over fintech’s risk management capabilities. And Facebook Inc.’s foray into cryptocurrency has drawn ire from lawmakers.
One option for tech companies has been to apply for an Industrial Loan Charter, which would effectively grant them license to provide financial services. Square first applied for the charter in the fall of 2017, but its request shows no signs of being approved. Social Finance Inc. also applied for an ILC, but withdrew its application altogether.
“It’s not easy to become a bank here, and we haven’t seen much traction in general with the ILC,” Matt Burton, partner at venture capital firm QED Investors, said. “What we have seen is continued demand for non-banks to offer banking solutions.”
Partnering with multiple small banks is just one option for fintechs. Some have teamed up with one big bank instead — like Apple Inc., which developed a credit card with Goldman Sachs Group Inc. But there are advantages to Cambr’s many-bank strategy. Some tech companies favor “the network approach over the big bank because they can negotiate better rates because both parties are getting something they want,” said Lindsay Davis, a senior analyst at CB Insights. Smaller banks are also more likely to play ball because they aren’t developing competing services.
Eventually, Cambr has its sights set on a bigger prize: It wants to handle deposits from the tech giants, not just the start-ups. Many industry watchers believe large tech companies will eventually move to offer more financial services, as Apple already has with the Apple Card and Amazon.com Inc. has with small business lending. But Siegel realizes that Cambr, the little-known product of the relatively little-known StoneCastle and Q2, faces some hurdles.
Now, driven by the tech industry’s thirst to jump into finance, a new crop of businesses are looking to broker the connections between tech and banks. One such business is Cambr, a little-known division of an investment company called StoneCastle, which counts Square and other fintechs as customers. StoneCastle works with more than 800 small banks, spread across the country, ready to take and hold deposits from Silicon Valley start-ups such as Square.
What Cambr aims to offer tech companies is a ready-made strategy to accept deposits that they wouldn’t otherwise have the license to handle.
Here’s how it works: A tech company or start-up might give Cambr as much as $100 billion of customers’ cash, and could then ask the service to spread the money around to potentially hundreds of different financial institutions. A result of spreading out the deposits is that more of the fintech’s cash is insured under the Federal Deposit Insurance Corp.’s $250,000-per-account guarantee, offering more coverage than if the money were deposited at a single institution.
The partnership model, which has rapidly become the go-to for financial technology companies, does pose some risks for banks, particularly if fast-moving start-ups draw the ire of regulators, as has happened before.
[ . . . ]
While the partnerships have injected cash into many small banks, some industry watchers have wondered if those banks could be left in a lurch if fintechs eventually got their own banking charters. If they did, community banks could find themselves as direct competitors to tech companies, without the same digital capabilities.
But so far tech companies have made scant progress toward winning banking charters, particularly as government concern over digital financial services has grown. Some members of the U.S. Federal Reserve have voiced concern over fintech’s risk management capabilities. And Facebook Inc.’s foray into cryptocurrency has drawn ire from lawmakers.
One option for tech companies has been to apply for an Industrial Loan Charter, which would effectively grant them license to provide financial services. Square first applied for the charter in the fall of 2017, but its request shows no signs of being approved. Social Finance Inc. also applied for an ILC, but withdrew its application altogether.
“It’s not easy to become a bank here, and we haven’t seen much traction in general with the ILC,” Matt Burton, partner at venture capital firm QED Investors, said. “What we have seen is continued demand for non-banks to offer banking solutions.”
Partnering with multiple small banks is just one option for fintechs. Some have teamed up with one big bank instead — like Apple Inc., which developed a credit card with Goldman Sachs Group Inc. But there are advantages to Cambr’s many-bank strategy. Some tech companies favor “the network approach over the big bank because they can negotiate better rates because both parties are getting something they want,” said Lindsay Davis, a senior analyst at CB Insights. Smaller banks are also more likely to play ball because they aren’t developing competing services.
Eventually, Cambr has its sights set on a bigger prize: It wants to handle deposits from the tech giants, not just the start-ups. Many industry watchers believe large tech companies will eventually move to offer more financial services, as Apple already has with the Apple Card and Amazon.com Inc. has with small business lending. But Siegel realizes that Cambr, the little-known product of the relatively little-known StoneCastle and Q2, faces some hurdles.
Thank you for the clarification. I learned something new today.Yes, but it's not easy to get a bank charter. It's a long process. For instance, Block (Square) first applied for a bank charter in 2017, was granted a conditional approval in early 2020, but didn't get fully approved until a year later. A 4-year process.
SoFi applied for a bank charter in 2017 too, but because it was taking so long, they took a "short cut" and bought a bank (Golden Pacific Bancorp) instead. I put short cut in parenthesis because it still took them 5 years.
SoFi's national bank charter widens door for fintechs
Larger fintech companies may see the Office of the Comptroller of the Currency's approval of SoFi's charter as a guidepost, but small and midsize fintechs might abstain from applying, policy and industry experts said.
SoFi achieved its bank charter from the Office of the Comptroller of the Currency largely through its acquisition of then-Golden Pacific Bancorp, completed Feb. 2. That concluded a journey that started in 2017 with an application for an industrial loan company charter with the Federal Deposit Insurance Corp., a subsequent withdrawal and its 2020 application for a national bank charter. SoFi also got approval from the Federal Reserve to become a bank holding company.
And this is with both of the companys having people with strong finance backgrounds working for them. Block's (Square's) former CFO (Sarah Friar) worked at Goldman Sachs before joining Square. SoFi's CEO (Anthony Noto) also worked at Goldman Sachs.
I don't believe Apple has anyone with strong fiancial backgrounds working for the company which means they'll need to do a lot of hiring.
If Apple was to go this route, we're looking at the end of the decade until Apple gets a bank charter.
I don't think the Federal Communications Commission will care. Lawmakers and others is a different story.
That's why Apple (and fintechs) partered with a bank. It's much easier and less headaches.
No banking charter? No problem. Fintech companies team up with small-town banks
Partnerships between high-flying tech companies and traditional banks, many of them tiny by comparison, are a key force behind the financial technology boom.
Partnerships between high-flying tech companies and traditional banks, many of them tiny by comparison, are a key force behind the financial technology boom. Because virtually no tech companies have the license required to perform banking services, many of them partner with existing banks to offer a suite of services including checking accounts, credit cards and the back-end and regulatory work the tech companies aren’t equipped—or allowed—to handle.
Now, driven by the tech industry’s thirst to jump into finance, a new crop of businesses are looking to broker the connections between tech and banks. One such business is Cambr, a little-known division of an investment company called StoneCastle, which counts Square and other fintechs as customers. StoneCastle works with more than 800 small banks, spread across the country, ready to take and hold deposits from Silicon Valley start-ups such as Square.
What Cambr aims to offer tech companies is a ready-made strategy to accept deposits that they wouldn’t otherwise have the license to handle.
Here’s how it works: A tech company or start-up might give Cambr as much as $100 billion of customers’ cash, and could then ask the service to spread the money around to potentially hundreds of different financial institutions. A result of spreading out the deposits is that more of the fintech’s cash is insured under the Federal Deposit Insurance Corp.’s $250,000-per-account guarantee, offering more coverage than if the money were deposited at a single institution.
The partnership model, which has rapidly become the go-to for financial technology companies, does pose some risks for banks, particularly if fast-moving start-ups draw the ire of regulators, as has happened before.
[ . . . ]
While the partnerships have injected cash into many small banks, some industry watchers have wondered if those banks could be left in a lurch if fintechs eventually got their own banking charters. If they did, community banks could find themselves as direct competitors to tech companies, without the same digital capabilities.
But so far tech companies have made scant progress toward winning banking charters, particularly as government concern over digital financial services has grown. Some members of the U.S. Federal Reserve have voiced concern over fintech’s risk management capabilities. And Facebook Inc.’s foray into cryptocurrency has drawn ire from lawmakers.
One option for tech companies has been to apply for an Industrial Loan Charter, which would effectively grant them license to provide financial services. Square first applied for the charter in the fall of 2017, but its request shows no signs of being approved. Social Finance Inc. also applied for an ILC, but withdrew its application altogether.
“It’s not easy to become a bank here, and we haven’t seen much traction in general with the ILC,” Matt Burton, partner at venture capital firm QED Investors, said. “What we have seen is continued demand for non-banks to offer banking solutions.”
Partnering with multiple small banks is just one option for fintechs. Some have teamed up with one big bank instead — like Apple Inc., which developed a credit card with Goldman Sachs Group Inc. But there are advantages to Cambr’s many-bank strategy. Some tech companies favor “the network approach over the big bank because they can negotiate better rates because both parties are getting something they want,” said Lindsay Davis, a senior analyst at CB Insights. Smaller banks are also more likely to play ball because they aren’t developing competing services.
Eventually, Cambr has its sights set on a bigger prize: It wants to handle deposits from the tech giants, not just the start-ups. Many industry watchers believe large tech companies will eventually move to offer more financial services, as Apple already has with the Apple Card and Amazon.com Inc. has with small business lending. But Siegel realizes that Cambr, the little-known product of the relatively little-known StoneCastle and Q2, faces some hurdles.
AMEX is just not as widely accepted as Mastercard & Visa. I hope they’re able to secure a partnership with a bank providing one of those.
Thanks for the referenice. Reading all the “nobody accepts AmEx” rhetoric, left me wondering where hell these people live. I frequently travel around the country and put practically all my expenses on my American Express. My experience aligns with the article, only one in a hundred (or less) transactions will not take the AmEx. I would prefer AmEx for the Apple Card, they are terrific to deal with and have terrific benefitS.Fixed it for you…..
99% of merchants in the U.S. who accept credit cards now take American Express
The most recent Nilson Report found that 10.6 million U.S. merchant locations accepted American Express at the end of 2019.www.cnbc.com
I assume that current members could stay with GS for a while. My brother still has the Citi AAdvantage mastercard despite Citi no longer partnering wit AA for many years.
yeah lol I moved all of it including the interest they paid out in May.
they did warn me they’d close it at some point if there was no money in it.
I can confirm about the lousy customer service part. Recently I bought my air ticket for a trip I have planned for the summer. My company has a discount program for flights and I took advantage of it. The flight was purchased successfully, but Apple card flagged the purchase as suspicious. I didn't realize until about an hour later when I checked my phone and saw the notification. The wallet app let me approve the purchase, but still said it was declined. I then reached out to GS customer support for next steps through the Apple Card Chat feature. The rep just said I should try again. I did, but the website said that flight purchase is a duplicate. It was at that point I decided to just wait it out because I didn't want to be double charged and have to sort that out with Apple Card support. Turned out to be the right decision. If I had purchased another non-refundable flight it would have been two charges and who knows if I could even get that disputed. But the lousy customer rep could have said, wait until the morning and see if it processes.
I assume Apple will want to open Apple Card out to more regions at some point. That said, if they do then having Amex as the provider to me possibly provides more expansion opportunity through that one partner. Think Amex would be better positioned to offer consumer financial services to other territories than Goldman Sachs, not that it’s still not a lot of work to work with regulators etc.
As an Australian, I feel Amex is well accepted in this region. Pretty much all major retailers I can think of support it other than Costco (who is relevant but not massive here). Some smaller places don’t, but the number that do has increased over the past decade and I can use Amex for the majority of payments.
Australia is also a very heavy Apple market at over 50% of smartphone users. Last I saw the split was something like 55% Apple to 45% Android. If Apple partners with Amex for payments in the region, most retailers would already accept it and I imagine the large Apple install base would see most outliers accept it.
Could see Apple preferring to go with Amex over the big 4 banks here too given some of the resistance they had with Apple Pay in the region in the past.
None of this may apply to regions outside AU, but I do think Amex is a viable underwriter in Australia. I’ve also found Amex support to be good to deal with, in my experience.