Goldman Sachs has lent out about $10 billion in credit to Apple customers so far, according to its recent regulatory filing.
Apple rolled out its first credit card, aptly named the Apple Card, in August. As the new Apple Card rolled out, some of its first members had no credit history or below-average credit scores. As of September 30, Goldman has lent out about $10 billion, and customers had $736 million in loan balances, the filings show.
Apple Card has Apple’s branding and is issued through Goldman Sachs and runs on Mastercard’s network. It’s only available to iPhone users and works similarly to any other credit card — you can use the physical card at all the usual places, as well as inside the Apple Pay feature to make contactless payments with an iPhone.
The card is Goldman’s latest foray into the retail consumer business after establishing its online Marcus brand in 2016. Marcus makes unsecured personal loans, including to consumers who are dealing with credit card debt.
As Apple takes center stage, the bank has slowed growth of Marcus, which held steady at $4.8 billion.
Nomura analysts predicted in an August report that it would take Goldman Sachs four years to break even on an Apple Card customer, assuming it took $350 to acquire the customer and that person spent $5,000 a year with an 18.5% APR. The analysts wrote that Apple’s desire to “approve as many iPhone customers as possible effectively puts [Goldman Sachs] in a position of having to approve applications to individuals with below average credit ratings.”
In its October earnings call, the bank’s chief financial officer, Stephen Scherr, said the percent of revenue spent on employee pay is expected to decline as the company zeroes in on tech-based ventures and “four key projects” — which include Apple Card, which is its first credit card, and Marcus, an online brand meant to be more consumer focused. In the most recently completed quarter, average pay per employee was $72,249, down from $83,168 a year earlier.