Why Chase is Apple Card’s ideal partner to replace Goldman Sachs
Apple and Goldman Sachs are working on a deal to wind down their Apple Card partnership, and Chase is the ideal partner to team with Apple, Mark Gurman writes for Bloomberg News.
Mark Gurman for Bloomberg News:
Between the engineering spending and losses on loans, the credit card was a disaster for Goldman’s balance sheet, contributing to billions of dollars in red ink… So Apple recently offered Goldman Sachs a deal to get out early. If Goldman accepts Apple’s overture, it’s likely to take more than a year for the partnership to wrap up…
[Apple Card] has millions of users and more than $10 billion worth of deposits in related savings accounts… [so] some of the banks that didn’t want to partner with Apple four years ago might be willing to reconsider today. The name that has been discussed publicly the most so far has been AmEx.
But the bank that probably makes more sense as Apple’s new partner is Chase, which already has a significant relationship with the iPhone maker… It offers credit cards that use the MasterCard network. That’s the same system that powers the Apple Card, meaning there’d be no need to switch to the Visa or American Express platforms.
The one component of Apple’s financial services portfolio that wouldn’t be a fit for Chase is its savings account. That product is touted as a high-yield account, with an annual rate of 4.15%… The savings account deposits could be sold and split up among banks willing to offer the same interest rates to Apple. And users of the accounts probably wouldn’t care or even notice, as long as they’re able to access their cash.
MacDailyNews Take: Users of Apple’s high-yield Savings accounts would, of course, also expect them to be FDIC-insured, which they would be if Apple decided to split up the accounts with a group of banks offering high interest rates.
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