Apple Card partner Goldman Sachs is taking a very Apple approach to making money from the venture, by pushing customer loyalty over squeezing out as much profitability as possible.
At an “IGNITION: Transforming Finance” event on Monday, Omer Ismail, who heads up Goldman’s Marcus division, talked Apple Card. Ismail also explained why he’s not worried about a potential lack of profit.
While credit cards are usually very profitable ventures, there are causes for concern with Apple Card. That’s because it boasts a lack of fees, helps users to pay less interest, and doesn’t provide access to customer’s data. All of these are ways that credit cards typically rake in cash for their providers. Citigroup reportedly pulled out of a deal with Apple for Apple Card on the grounds that it would not be profitable.
But Goldman Sachs (appropriately enough, given their partner) apparently thinks different. “When I think about Marcus overall, the idea that doing right by the customer means being less profitable is just not an idea we subscribe to,” Ismail said on Monday. “If you do right by the customer, you’re going to ultimately win their loyalty.”
An exciting new venture
Ismal also noted that Goldman’s Marcus division is still relatively new. This means that it does not have the “legacy” business models of some competitors. In other words, it’s running on a lean startup model that will let it achieve profitability at a lower cost.
Goldman Sachs’ research has predicted that Apple Card will garner about 21 million users by the end of 2020, with card holders spending an estimated $1,000 per month. That would generate about $882 million in revenue. It’s not clear exactly how this will be split between Apple and Goldman Sachs.
Apple Card is set to launch this summer. It is said to currently be in beta testing with Apple employees ahead of its launch.
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