Last month, a report explained that Citigroup pulled out of its potential deal with Apple for the new Apple Card over profitability concerns. Apple ultimately partnered with Goldman Sachs for the card, and now a Goldman exec is defending the partnership despite profitability concerns.
Speaking at the Business Insider Ignition Finance event today, Goldman’s head of consumer digital finance in its Marcus division, Omer Ismail, said the company isn’t worried Apple Card’s profitability.
Ismail explained that Marcus doesn’t buy into the idea that in order to do what’s right for consumers it must be less profitable. He also pointed out that by doing right by the consumer earns their loyalty in the long run:
“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. “If you do right by the customer, you’re going to ultimately win their loyalty.”
The banking exec also explained that Goldman Sachs carries less baggage than traditional banks. It is brand new to the consumer finance industry, which means it is building its business based on modern and nimble technology. This is far different than some of the other banks, who are currently revamping aging technology for the digital age. Theoretically, this should allow Goldman to run its credit card business more efficiently than other companies.
“We don’t have any legacy business models and we don’t have any legacy technology,” Ismail said.
Apple Card was first announced back in March with a handful of consumer-friendly features, including ones that encourage you to pay your full balance and avoid interest charges. Apple Card also touts no annual fee, no over-limit fee, no balance transfer fee, and many other benefits compared to other cards. In March, we explained some of the ways Apple Card will make money despite its consumer-friendly setup.