One week after we reported that in its latest push to take the retail banking world by storm, Goldman has sunk so low that about 20% of the clients on its consumer loan "Marcus" platform are considered subprime and that in its push to attract even more home-improvement loan clients, the bank recruited former "bachelorette", JoJo Fletcher, to, well, sell subprime loans...
... it now appears that Goldman has another cunning plan of taking the retail banking world by storm: launching a joint credit card with Apple, a move which according to the WSJ "would deepen the technology giant’s push into its customers’ wallets and mark the Wall Street firm’s first foray into plastic."
The planned "Appleman Sachs" card would carry the Apple Pay brand and could launch as soon as early 2019; as part of the transition to Goldman, Apple would replace its longstanding rewards-card partnership with Barclays.
But why would Wall Street's (formerly) best connected FDIC-backed hedge fund need to bother with such a low-margin product as a credit card? The same question goes for aApple?
Well, according to the WSJ, the joint card could help the companies combat weaknesses in their core businesses:
As new iPhone sales growth slows, Apple is focusing on services such as mobile payments, streaming-music subscriptions, and App Store sales. Apple Pay, which generates revenue on each transaction, is a key contributor, but adoption has been slower than executives hoped.
Goldman, meanwhile, is pushing into consumer banking to compensate for a slump in securities-trading, where revenue has fallen by two-thirds since the financial crisis. It launched a retail banking business called Marcus in 2016 for online savings accounts and personal loans, and executives have been exploring adding credit cards and wealth-management tools.
Of course, what matters to Goldman is scale which the bank can not achieve at the revolving credit level, so the partnership will extend into other services including Goldman offering in-store loans to Apple customers buying iPhones and other gadgets.
Translated: the next time you want to buy an iPhone, a cheerful, minimum-wage Goldman employee will offer you a generous $100,000 loan, which just happens to reset into a generous 14.95% APR 6 months after funding...