Data Dive

Data Dive: Coming, Going And Returning With Apple, PayPal And Wells Fargo

Twenty years ago today the last new episode of Seinfeld aired, much to the moaning and groaning of fans everywhere — especially after they saw the last episode itself. The world moved on, of course — new things always rise up to replace old ones — and besides, in the era of Netflix, nothing is ever really gone. You can always watch the old episodes — and if it is a beloved artifact from the 90’s, you can be sure someone has thought seriously about making its return possible.

Seinfeld reboot anyone?

Eh, probably a “no soup for us” situation — but in honor of Seinfeld saying goodbye two decades ago, we decided to turn the data dive over this week to entrances, exits and reboots in the form of Apple, PayPal and Wells Fargo…

Say Hello To The Apple Card

The hot payments news on the street this week is that Apple and Goldman Sachs are working hard behind closed doors to jointly bring a credit card all their own to the market.

Details are highly limited, but according to reports in The Wall Street Journal, the card will be issued under the Apple Pay designation and could be on the market as soon as early 2019.

According to “people familiar with the matter,” Apple will replace its current relationship with Barclays, which currently issues Apple’s rewards card, marked by interest-free financing and rewards points tied to Apple gift cards.

Have we mentioned how we find it more than mildly ironic that Apple Pay is turning to the object of its ridicule — the plastic card — at its launch now some 40 months ago to ignite the mobile payments innovation that’s been sputtering along ever since? They even made a video of how horrible the plastic card experience was.

The joint plastic play, according to the experts, checks a variety of boxes for both firms. Goldman gets a very shiny, and very trusted, banner under which to launch the first credit card it has ever issued. Apple gets a bite at deepening its push into its customers’ wallets.

And that push is important, as Apple is looking to derive ever-larger value from its services business (home of Apple Pay) as the premium smartphone market rapidly reaches maturity.  Apple sold only 2.9 percent more iPhones in the first quarter than a year ago. At 52.2 million units, that is far from bad news.

But services revenues were up 31 percent, to $9.2 billion.

Beyond the card, ancillary services will be on offer, as Goldman will feature loans for customers who come into stores to buy Apple’s hardware.

It’s an attention-getting push, and one that boosted Apple stock slightly (while Goldman’s remained flat). But, as timing would have it, Apple and Goldman were announcing their plastic partnership just in time for PayPal’s CEO to declare that plastic is dying.

Dan Schulman Waves Goodbye To Plastic Cards

Said simply, PayPal CEO Dan Schulman thinks plastic credit cards are an endangered species — and in 20 years, they won’t exist at all.

“Twenty years from now, there will be no more plastic credit cards, really,” Schulman said at TheStreet’s Investor Boot Camp conference in New York. “Why have them when you can have a QR code or NCR tablet?”

It was one of many colorful opinions on offer from PayPal’s leader, who also noted that while he still believes in blockchain technology, it will not be coming to the PayPal or Venmo platform anytime soon.

“We don’t want to be a part of consumers losing large amounts of money,” Schulman said.

He also noted that although mobile payments is, in fact, becoming a much more competitive space — something to be fully expected in a world where card payments are fading out — he is not worried about the emerging competition it is dealing with from players like Amazon Pay or Zelle (the big banks’ answer to Venmo.)

Competition, according to Schulman “is like gravity — there’s always competition around. No one company is going to own digital payment companies, that’s for sure,” he said.

And while Schulman notes that he “always sweats what the competition is doing” and that he maintains a wholly healthy level of paranoia, he believes PayPal’s numbers speak for themselves.

The digital future is here, according to Schulman — hence cards taking the curtain call.  The mystery is: what will take center stage after that last bow?

Wells Fargo Attempts A New Groove

There is probably no financial services firm in need of a makeover when it comes to public perception than Wells Fargo. Over the last two years, the firm has been inundated with bad press — not to mention hit with over $1 billion in fines — as it has been accused time and time again of hitting its customers with unwarranted and illegal charges.

In that light, it is not all that surprising that they are hoping to hit the reset button a bit.

Wells Fargo announced Monday (May 7) that it has started with a new marketing campaign, dubbed “Re-Established,” which focuses on its commitment to rebuilding stakeholder trust following its fake account scandal and its mortgage fines scandal.

“In the past 20 months, we have transformed Wells Fargo by simplifying our business model, investing for the future and strengthening our culture,” said Tim Sloan, the bank’s chief executive officer and president. “While we have made solid progress, we recognize there is still work to be done. This campaign marks a turning point by expressing how we are fundamentally a different company today, and that it feels like a new day at Wells Fargo.”

The first part of the initiative will be the release of a one-minute commercial called “Trust.”

“‘Re-Established’ means recommitting to our customers and team members, reaffirming support of our communities and reinventing how we serve our customers through every interaction — [and] in new and improved ways,” said Jamie Moldafsky, Wells Fargo’s chief marketing officer. “It is about holding ourselves to a higher standard, and our unwavering commitment to become a better bank.”

Wells Fargo is in growth mode, despite the ongoing challenges of its list of account scandals. According to a new report from the Financial Times, its investment banking unit is reportedly gearing up to hire hundreds of new employees — including approximately 20 managing directors who can bring on clients or provide additional capabilities.

Wells Fargo’s securities unit will also continue to expand. It is currently putting more efforts behind its equity capital markets and mergers and acquisition (M&A) businesses, spaces in which it has previously played a smaller role. The unit boasts nearly 5,000 employees and will hire hundreds more in 2018, many of whom will be brought on to replace those who aren’t performing well.

Well Fargo is turning over a new leaf — or at least trying. And we do agree that trust is job number one.

So what did we learn this week?

Apple and Goldman are hoping that there’s safety in numbers as each seeks to find its own S-curve in the tough business of igniting mobile payments and credit services. PayPal CEO tells us that keeping S-curves on their S-curve trajectory means looking to the future and not the [plastic] past. And Well Fargo taught us that if at first, or second, you don’t succeed — hire a branding agency and get a new tag line and jingle.

Have a good week!


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.