Chase to become new issuer of Apple Card

[roughly]

I used to have a Chase card, but decided I didn’t like dealing with them, so I closed the account.

And then they bought my bank, and I had a Chase account again. I gave them a chance and they were still awful, so I switched banks.

A couple years after that, they bought my bank, and I had a Chase account again. This isn’t a duplicate paragraph, it happened again. I gave them a chance again, and they were still awful, so I switched banks again (to a credit union, which, fingers crossed).

Now I guess I get to do business with Chase again, which is neat. I’m happy to be part of an economy where I can vote with my dollar like this.

[jez]

Far be it from me to get in the way of someone protesting megabank centralization, but...

I have to imagine that this bank relationship will be different from those previous acquisitions? I never interacted with Goldman Sachs for the duration I've had my Apple Card—the relationship is entirely with Apple and their iOS app. I don't imagine that to be much different when Chase is the issuer.

[Order]

What made you not like dealing with them?

Maybe I’m a passive user, but my credit cards are autopay set it and forget it. As someone with no opinion on cc companies, curious what gave you such a bad impression.

[xeromal]

Did you have first republic? RIP. I miss that bank so much.

[TMWNN]

>Now I guess I get to do business with Chase again, which is neat. I’m happy to be part of an economy where I can vote with my dollar like this.

You were unusually unlucky. The US has a very decentralized banking system, with thousands of institutions. The Big Four (JPM, BAC, C, WFC) have under 50% of total deposits; the comparable figure for Canada's Big Five is ~85%,

[mgh2]

Creeping fees if accidentally pass a withdrawal limit, not to mention abysmal interest rates for parking your money there.

[daft_pink]

Just want to point out that people have said it’s been very very hard to get Goldman Sachs to dispute a transaction, so I’m hoping that Chase will offer better service than Goldman as Goldman’s actual service is supposedly not very good.

[dyauspitr]

What is awful though? Like what was wrong. I have one of their Amazon cards and their app is decent and their card has all the standard functionality.

[socalgal2]

Same and Same. Closed account because of bad experiences. Later they bought my bank. Raised prices 10x+ and lowered services. Got out ASAP.

[hota_mazi]

Switch to Android and you should be safe.

[stevefan1999]

Sounds like a recursive function

[TazeTSchnitzel]

Goldman Sachs was new to consumer banking and it has long been apparent that Apple outplayed them with the Apple Card deal, causing them to lose a lot of money, and so they have been wanting to get out of it: https://appleinsider.com/articles/23/10/16/goldman-sachs-reg...

[malshe]

This is impressive because whenever I hear Goldman Sachs, this line by Matt Taibbi comes to mind:

   The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

(https://www.rollingstone.com/politics/politics-news/the-grea...)

[fullshark]

I don’t really get why it’s a bad deal for GS or how “Apple outplayed them” based on that article. Just seems like a frayed partnership cause they didn’t hit their numbers.

[jez]

Does that mean that this new partnership will be better because Chase is better at consumer banking than Goldman Sachs, or Chase negotiated a deal that will not cause them to lose a lot of money?

If it's the latter, does that mean that the card rewards for Apple Card will get worse?

[MBCook]

The savings accounts are through GS as well. The transition page basically says “nothing to announce yet”, in a way that implies they may move somewhere as well.

[reed1234]

WSJ says you’ll be able to choose between keeping your savings account at Goldman or switching it to Chase.

[felineflock]

It may seem irrelevant for some, but I wonder: will they still offer the laser-etched titanium card instead of plastic?

[rocketvole]

It was really the only reason I considered getting one. I suspect this will be relevant to more people than you might expect- iirc it's the only titanium (metal?) credit card you can get without an annual fee.

[rizza]

Part of this is J.P. Morgan Chase paying for customer base. JPMC can't legally buy any banks anymore unless it's at an fdic auction for a failed bank. That means that the only way to bring in new customers is organic growth and taking over company/store cards from other banks. If JPMC sees an ROI on this, I expect that they will start aggressively going after established store card like the old navy/gap card or airline cards like the American Airlines card. They instantly get thousands of new customers to market their other services to, can offer cross promotion into their most valuable fee cards (sapphire reserve) for less cost, and get to expand their market information gathering operation that feeds into their investment banking and commercial banking lines of business to inform better understanding of the market.

[catgirlinspace]

more discussion at https://news.ycombinator.com/item?id=46536848

[daft_pink]

It’s interesting when you look at the FAQ that everything will still be managed on the iPhone and nothing will go through Chase’s portal.

[AdieuToLogic]

For the purposes of this post, American Express is not germane and thus omitted.

To fully understand this press release, we have to start with "the five circles" diagram which shows the simplest form of the entities involved in credit card processing:

          /-----------------\
          | Payment Network |
          \-----------------/
          /                \
  /--------\             /-----------\
  | Issuer |             | Processor |
  \--------/             \-----------/
      |                       |
  /-------------\        /----------\
  | Card Holder |        | Merchant |
  \-------------/        \----------/

  An example of a Payment Network is Visa.

  Issuer and Processor are banks allowed to connect to the
  Payment Network directly.

  Card Holder is a person who has a credit card account
  provided by an Issuer.

  Merchant is a company which performs credit card
  transactions via their Processor.

Now, companies which are neither a bank nor sponsored by a bank cannot directly interact with a Payment Network. Visa, MasterCard, Discover, none of them. Those companies must use a Processor (more on this later).

Which is why Chase (or bank equivalent) must be the "new issuer of Apple Card", since only an Issuer can do so (as illustrated above).

An important concept to revisit is that only banks or companies sponsored by banks can connect to a Payment Network. Companies sponsored by banks in order to enable them to directly communicate on a Payment Network are typically other banks and often have to give up an ownership stake to their sponsor.

Which means there must exist another element in the "five circles" diagram to explain offerings such as Apple Pay, PayPal, Stripe, Venmo, etc.:

          /-----------------\
          | Payment Network |
          \-----------------/
          /                \
  /--------\             /-----------\
  | Issuer |             | Processor |
  \--------/             \-----------/
      |                       |
      |                    /-----\
      |                    | ISO |
      |                    \-----/
      |                       |
  /-------------\        /----------\
  | Card Holder |        | Merchant |
  \-------------/        \----------/

Here, "ISO" are the payment services such as the aforementioned Apple Pay, PayPal, Stripe, Venmo, and friends. Ultimately, though, it is a bank which is the Processor which powers them. And in the Processor space, Chase is the 800lb gorilla.