Citigroup pulled out of the Apple Card deal over profitability fears

Apple's physical laser-etched titanium Apple Card

Apple’s physical laser-etched titanium Apple Card coming summer 2019

“The sniping began shortly after Apple unveiled its new credit card with Goldman Sachs,” Hugh Son reports for CNBC.

“Within the industry, the deal is widely perceived as one that’s risky for a bank to take on,” Son reports. “Citigroup was in advanced negotiations with Apple for the card but pulled out amid doubts that it could earn an acceptable profit on the partnership, according to people with knowledge of the talks. Other banks, including J.P. Morgan Chase, Barclays and Synchrony, also bid on the business.”

“It turns out that the Apple Card’s consumer-friendly features — no fees of any kind, software that actively encourages users to avoid debt or pay it down quickly, and potentially lower interest rates — make it harder for banks to make money on the product,” Son reports. “Big card issuers profit when customers fall into debt and stay there. Americans paid $113 billion in credit card interest to banks last year, nearly 50% more than five years ago. So adopting the new fintech ethos of zero fees and transparent pricing makes for thinner profit margins.”

Read more in the full article here.

MacDailyNews Take: Sour grapes. Citigroup blew it. Apple and Goldman Sachs have a hit on their hands. The results of our poll taken last month speak volumes:

Will you apply for Apple Card poll results

Will you apply for Apple Card poll results

Related articles:
Apple changes the world yet again; soon every credit card work like Apple Card – May 24, 2019
Apple employees are beginning to get their Apple Cards – May 13, 2019
Why the Apple Card is the gleaming future of money – April 29, 2019
Analyst: Apple Card to be a ‘significant player in the U.S. card market’ – April 4, 2019
Apple Card will be the most secure credit card ever made – April 3, 2019
Survey shows iPhone users want the Apple Card – which could greatly increase Apple Pay usage – March 29, 2019
Apple Card: More than just a mere credit card – March 28, 2019
Apple Card’s fine print – March 28, 2019
Millions of dollars are being lost to Apple Pay fraud – Apple Card to the rescue! – March 27, 2019
Apple just revolutionized another industry with Apple Card – March 26, 2019
Introducing Apple Card, a new kind of credit card created by Apple – March 25, 2019

This article was originally posted here