Through its iPhone-connected Apple Card, Apple seeks to compete in the credit card market by reducing the friction in retail transactions. The biggest source of friction in commerce, however, is lack of trust: the less we trust our trading partners, the more we (and they) must invest in costly monitoring and enforcement mechanisms in order to do business. As those costs rise, fewer marginal transactions can be executed profitably. That makes trustworthiness perhaps the most significant asset a business firm or a business person can have. The more trustworthy you are, the more marginal business transactions you can make profitable for yourself and your trading partners.
Through mechanisms like co-branding and outsourcing, trustworthiness can be gained – or lost – by association. Against this background, the linked article is interesting. In it, the author identifies three technical limitations of Apple Card that may work limit its acceptance by consumers and merchants, but then turns to a potential source of distrust: Apple’s partnership in offering and administering Apple Card with Goldman Sachs. It is up to the reader, of course, to decide whether the author makes a persuasive case against the trustworthiness of Goldman Sachs. The piece illustrates, however, that technical merit is only the beginning of having a good product. Technical merit carries you only so far if people don’t trust you – or those you’re counting on as agents – to deliver what you promise. >>>
LINK: Apple Card: Three fatal flaws that hinder usability (and then there’s Goldman Sachs) (by David Gewirtz for ZDNet)
But let’s not forget: Goldman Sachs was instrumental in causing the financial crisis of 2007-2008. The company not only received the largest TARP bailout of any firm (which they did repay), but then went on to pay out billions of dollars in executive bonuses.
This is the same Goldman Sachs that had nearly 1,000 subsidiaries functioning as offshore tax havens to avoid taxes and that helped Greece hide its debt, fostering the European sovereign debt crisis.
This is the same Goldman Sachs that has a history of executives prosecuted for insider trading, that pushed the housing crisis over the edge with junk mortgage speculation, that was then charged with securities fraud by the SEC.
This is the same Goldman Sachs that was fined millions by the SEC for improper securities lending practices, that has been the subject of criminal charges by the nation of Malaysia for misappropriating billions of dollars from the proceeds of bond sales, and that has been fined millions of dollars by the UK Financial Conduct Authority.
That Goldman Sachs.
So, yeah, when Apple VP of Internet Services Jennifer Bailey says “Goldman Sachs will never share or sell your data to third parties for marketing,” I sure feel secure. Don’t you?
What do you think?