Goldman Sachs stresses that it decides who gets an Apple Card - after Apple's snub that it was 'created by Apple, not a bank'

Hollis Johnson/Business Insider

• The slogan for Apple Card is "created by Apple, not a bank" - but Goldman Sachs decides who gets one, shoulders the risk of lending billions, and collects unpaid debts.
• "Whoever lays claim to the creation of the card, there's only one institution that's making underwriting decisions, and that's Goldman Sachs," the bank's finance chief said on Wednesday.
• "The ultimate decision sits with us," he added. "We calibrate, manage our risk and collections in the context of that."
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The Apple Card's slogan is "created by Apple, not a bank" - but Goldman Sachs stressed this week that it decides who gets the credit card, shoulders the risk of lending billions to customers, and collects unpaid debts.

RBC Capital Markets analyst Gerard Cassidy asked Goldman if, when a recession hits and default rates rise, the Apple Card's marketing could make it difficult for the bank to chase down debtors, given the potential damage to Apple's brand and reputation for customer service.

"Are you going to be hamstrung trying to collect those delinquencies because of the way it's been branded as an Apple Card, and it's not a bank?" he asked finance boss Stephen Scherr on Goldman's earnings call.

"Whoever lays claim to the creation of the card, there's only one institution that's making underwriting decisions, and that's Goldman Sachs," Scherr replied.

Goldman worked with Apple to set goals for the card, and the iPhone maker is fully aware of how the bank makes its lending decisions, Scherr continued.

"But the ultimate decision sits with us," he said. "We calibrate, manage our risk and collections in the context of that."

Perhaps recognizing the challenge of collecting, Goldman has been picky about who gets an Apple Card, favoring consumers with excellent credit scores who are least likely to default. However, it has already lent more than $10 billion to Apple Card customers, Bloomberg reported in November.

The Apple Card was a joint effort

Apple claims to have created the Apple Card, but Goldman spent about $300 million developing it, the Wall Street Journal reported. The bank also reassigned thousands of engineers to fix a security issue with the card and finish it in time for its August launch, delaying other products by months, the newspaper said.

At Apple's request, Goldman also scrapped late fees and agreed to not sell customer data, The Journal reported. It also adopted the tech giant's signature font for cardholders' monthly statements and - against its lawyers' advice - pruned them of standard industry language, the newspaper said.

The Apple Card's marketing also overlooks Amazon's hand in its creation.

"Building the credit-card platform that underpins Apple Card took a number of our engineers ... along with a very strong partnership with Apple, Mastercard and, of course, AWS," Goldman CEO David Solomon said at a conference in December, referring at the end to Amazon Web Services, the e-commerce titan's cloud-hosting business.

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