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A comment on Apple Could Be Working with Goldman Sachs on a Credit Card.

Re:Apple Could Be Working with Goldman Sachs on a Credit Card by duxup on Thursday February 21, 2019 @11:26AM (#19217925)
On the surface this would seem to be a way to get to the processing fees and etc that occur with any transaction when it comes to Apple's systems. Considering the amount of money going through Apple for various things, this is probabbly a cheap deal to make with a lot of upside.

Amazon has their card, Costco, retailers, etc.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by gbrown on Thursday February 21, 2019 @11:43AM (#19218092)
The fees per transaction charged by credit card companies seem crazy to me in 2019, in that they're exorbitant and bear no relationship to their actual costs. The industry really seems like it should be a candidate for anti-trust action.

I have no relevant domain expertise though, so I'd be interested to hear alternative viewpoints.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by dalyons on Thursday February 21, 2019 @11:52AM (#19218191)
idk why you're downvoted; australia did exactly that recently - there's now a federal law capping credit card interchange fees at 0.8% maximum. The EU is now 0.3% max.

Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on everything)

EDIT: also, it feels very discriminatory. Well off people get the fancy cards with the biggest kickbacks, poor people get shitty cards with no benefits, but everyone pays the hidden 3% tax....

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by tfehring on Thursday February 21, 2019 @02:08PM (#19219643)
> Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on everything)

It's definitely kind of silly and it's definitely regressive, but your numbers are off. In reality, I get ~2% back in rewards in exchange for a ~0.25% tax on everything. The math for this works out because most transactions aren't made with credit cards. https://www.bostonfed.org/publications/public-policy-discuss...

I'd still support regulation that addresses this - either by directly capping interchange fees or using a different approach - but I personally won't be better off because of it.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by dalyons on Thursday February 21, 2019 @04:39PM (#19220790)
fair point on the debit lowering the effective "tax".

I'll point to my edit and restate that its better for you, because you're well-off enough to get a 2%-back card. I'm guessing that the average across all cards/americans is much lower than 2%.

(i'm an immigrant to the US, and for the first few years all you can get is the crappy starter cards available to people with poor/no credit, that have no benefits. These days, im in your boat - i qualify for the fancier cards so im essentially making money of the back of everyone that doesnt. So i would be worse off too, but i think thats fine)

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by lotsofpulp on Thursday February 21, 2019 @12:01PM (#19218294)
As long as vendors are free to offer different pricing based on payment method, it should resolve itself.

Even right now, I don’t think there’s is anything stopping vendors from offering everyone x% off by using debit cards.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by leesalminen on Thursday February 21, 2019 @02:39PM (#19219861)
You can do it with credit cards as well. The trick is that the merchant must frame it as a “cash discount” and not a “card surcharge”. This means that the prices posted are the “full price” and then you can discount it on the cash.

There’s been a lot of back and forth on this over recent years, but this is my understanding of what’s currently allowed. Could change tomorrow if Visa changes their mind.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by lotsofpulp on Thursday February 21, 2019 @03:15PM (#19220188)
The FTC's website clearly says the merchant is free to offer a discount for different methods of payment, such as cash or debit card, so I don't think Visa has any power here.

https://www.ftc.gov/tips-advice/business-center/guidance/new...

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by FabHK on Thursday February 21, 2019 @12:05PM (#19218325)
> long as vendors are free to offer different pricing based on payment method

My understanding is that the merchant agreement the vendor has with the credit card company prohibits that.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by lotsofpulp on Thursday February 21, 2019 @12:54PM (#19218894)
FTC website says different:

https://www.ftc.gov/tips-advice/business-center/guidance/new...

>Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by maxxxxx on Thursday February 21, 2019 @12:37PM (#19218689)
"As long as vendors are free to offer different pricing based on payment method, it should resolve itself."

Credit card companies do everything they can to block this.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by lotsofpulp on Thursday February 21, 2019 @12:54PM (#19218901)
I was under the assumption that this is still in effect:

https://www.ftc.gov/tips-advice/business-center/guidance/new...

>Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by gbrown on Thursday February 21, 2019 @12:35PM (#19218662)
There was just a lawsuit about that, and it went... poorly.

https://www.washingtonpost.com/business/economy/supreme-cour...

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by lotsofpulp on Thursday February 21, 2019 @12:53PM (#19218886)
I think that only applies to other credit cards, but not debit cards or cash:

https://www.ftc.gov/tips-advice/business-center/guidance/new...

>Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by gbrown on Friday February 22, 2019 @10:23AM (#19226056)
Still, that kills any incentive for fee competition between cards - they all share the benefits of being convenient and face little pressure to change the fee structure.
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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by lotsofpulp on Friday February 22, 2019 @09:03PM (#19231112)
But it’s not stopping the merchants from offering discounts for debit and cash, debit cards of which have capped fees and are very cheap to process.

Merchants are choosing not to give those customers discounts.

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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by thinkling on Thursday February 21, 2019 @11:45AM (#19218119)
Afaik, processing fees for higher-volume vendors are below 3% and kick-backs to consumers tend to be 1-3%. Is there much margin left for VISA, the bank, and Apple to share? Can anyone here can speak to this from inside experience?
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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by asperous on Thursday February 21, 2019 @11:50AM (#19218169)
There's also the revenue on interest for people who keep a balance (often 10-30% apr). I don't know how much would go back to Apple after the default risk, but its something to keep in mind for unit economics.
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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by thinkling on Thursday February 21, 2019 @12:01PM (#19218292)
Do you happen to know how revenue breaks down between processing fees and interest on carried balances?
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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by notatoad on Thursday February 21, 2019 @12:12PM (#19218396)
i don't know the numbers for each, but my understanding is that processing fees are paid to the card provider (visa or mastercard) and interest is paid to the issuing bank. visa isn't making money off the interest, and your bank isn't making money off the fees.
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Re:Apple Could Be Working with Goldman Sachs on a Credit Card by asperous on Thursday February 21, 2019 @07:14PM (#19221915)
Makes sense, Visa isn't a bank per se so they don't want to carry the default risk and make worthiness decisions. I wonder what the split between Goldman Sachs / Apple is.
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