Visa has reportedly offered to hand over $ 100 million to apple in order to take over payment processing for its credit card, replacing mastercard. The offer come as apple is in the process of replacing goldman Sachs as the Issuing Bank of Apple Card after that Company Decided to get out of the consumer lending business.
The offer was reported on tuesday by the Wall Street JournalWhich say that American express is among others trying to win the deal; Mastercard is trying to retain the business. Credit Card Processors like Visa and MasterCard Communicate Transactions Between the bank of the customer and the retailer and the retailer and take a small cut of each transaction. Visa Previous Threw out Cash to become the payment processor for costco’s credit card.
Apple introduced its credit card back in 2019 as a way to increase lyyalty and generate a new stream of revelation. It does this by taking a cut of that transaction fees as well as slicing off a portion of earnings from the high-yield saving savings accounts it offers through goldman. Goldman reportedly decided to end its relationship with apple, it was bleeding cash by offering the card to customers with low credit scores, somebing Apple Had Demanded. It also also could not charge annual fees for the apple card, something many premium credit cards come with these days. Goldman was desperate to get into consumer lending during the pandemic, and apple essentially fleed the bank.
Still, The Wsj Reports that apple card customers are carrying $ 20 billion in balances, suggesting whoever takes over the businesswal stand
Financial companies are also worried that apple unheri cut them out of the business if it decides to take control of even more of the payments stack; Apple Traditionally Likes to Control every aspect of its products:
But there’s a much bigger picture with apple. The tech giant is increasing the epicenter of many consumers’ Daily Payments and other Financial Habits. Big banks and networks for years have been wary of apple’s ambitions and have developed a freanemi relationship, taking steps to keep the tech giant from making More Inroads in Consumer FinanceWhile seeking to be close to apple.
The network that locks in this deal is expected to stay close to apple’s future payments efforts.
Late Last Year, Apple and Goldman WERE HIT With An $ 89 Million Fine From the consumer Financial Protection Bureau Over Problems with the Roll-Oout of the Apple Card, Including Poor Customer Customer Support and Unclear Terms for Its Zero -inrest Finance Finance on Purchasses of Apple’s website. The CFPB Reported that Cardhlders Assuced All Purchasses from Made Using The Card Were Eligible For Zero-Interest Financing, When in Fact Cardhlders Needed to use the Safari Browster and Select Option at checkout the get the deal.
Apple’s credit card is a fin product, but there are other credit cards on the market that offer better perks –nd do not require cardhlders to use an iphone. Apple Forces Customers to Use Apple Pay in Order to Get 2% Cashback on Spend (select merchants offer 3% back); Using the physical card only earns 1% cashback. The card also does not offer perks of other cards, like purchase protection or access to exclusive lounges.
The fact of the matter is that there are a multideit cards out that the same exact cashback as apple card in addition to other benefits and do not leave users locked in the apple eccosystem.