129
Report: Apple to end partnership with bank that backs Apple Card, savings accounts
(arstechnica.com)
this post was submitted on 30 Nov 2023
129 points (100.0% liked)
Technology
59427 readers
4429 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Yes, the terms are indeed extremely generous to their customers.
If I’m reading this article correctly, Apple as the payment processor earns between 1.55-2.6% per transaction, since the Apple runs on the MasterCard network. Likely this means they get 1.55% for regular transaction and 2.6% for Apple Pay ones. But since they pay 1% cash back on the former, and 2% on the latter, their cut is only about 0.6%, likely just barely enough to cover their own costs. On transactions made directly at Apple or one of their partners, they likely end up losing a little money, which is why I compared the card to a loyalty program.
Like I said, Apple doesn’t need to make any money on this, they already make more than enough on their hardware. This is simply a service they provide in order to make their customers happy and incentive them to stay loyal to the company. As long as their operating costs are covered, they’re good.
As far as Goldman goes, again, if I read the article correctly, they DO collect the interchange fees, so perhaps my initial assumption, that they only get to make money on interest, was incorrect. But if this is the case, them losing billions of dollars on this deal despite earning between 1.15-2%, plus 10 cents on each transaction would be even worse.
Either way, for Apple Card customers this was/is certainly a very good deal, so I do hope that Apple will find a way to continue this service. It’s by far the least problematic credit card I’ve ever used, and I had quite a few. Really the only downside of it is that the cash back comes on a virtual Discover card for some reason, so you can only spend it at merchants who accept Apple Pay AND Discover. While that’s still far more than you’d think, because basically every store that uses Square’s POS systems qualifies, as well as most (but not all) stores that accept Apple Pay, it can be a little annoying. I do think you have the option of transferring the reward balance to your bank account, but that likely takes a couple of days and there’s probably a minimum involved.