Apple and Goldman Sachs Group are readying the launch early next year of a joint credit card branded with Apple Pay. This will be Goldman Sachs’ first credit card, and it will also replace Apple’s current rewards-card with Barclays. Apple Pay, which generates revenue with every transaction, has been slow to take off, and Goldman’s move into consumer banking is intended to compensate for a significant dip in securities trading. In 2016, Goldman Sachs also debuted Marcus, retail banking for online savings and personal loans.
The Wall Street Journal reports that, “Apple and Goldman are still hashing out the terms and benefits of the planned card including the perks for customers.” Currently, the Apple-Barclays credit card “offers interest-free financing on Apple devices and points toward Apple gift cards.” Goldman also plans to offer “in-store loans to Apple customers buying iPhones and other gadgets.”
Apple is not alone in moving into banking and finance; Amazon, Google and Samsung Electronics are “all vying to make mobile payments easier for consumers while adding to their formidable revenue streams.”
Benefits to Apple with the Goldman card include an increase in revenue by earning $100 or for each new cardholder; Goldman also “has the potential to raise Apple Pay’s profile, tying the mobile payment service to plastic touted in advertising and pushed by cashiers at Apple stores.” Apple could also “take a larger cut of mobile payments from the card if it is used for purchases,” said one source; with its digital wallet, Apple receives 0.15 percent per transaction, which it could more than double with the Goldman card.
The new credit card would boost Goldman’s “nascent retail-banking operation, launched in 2016,” by adding “new customers who may be sold other banking products.” Goldman also has a long-standing relationship to Apple, and the card could deepen those ties.
Goldman, which has, however, only been in consumer finance for two years, “lacks much of the infrastructure to be able to issue credit cards and process payments to merchants,” and “credit cards are a cutthroat business dominated by larger rivals like JPMorgan Chase and Citigroup.” It’s unknown whether Visa, Mastercard or Discover will process transactions for the card, but Apple “has had a longstanding relationship with Visa, which is based in San Francisco.”
Representatives from Barclays, which began issuing its Apple credit card in 2005, met at Apple “to determine whether the account — one of its most high profile — would be extended.”