Coverage: Apple and Goldman Sachs team up for credit card

Apple Inc. and Goldman Sachs Group Inc. are preparing to launch a new joint credit card, a move that would deepen the technology giant’s push into its customers’ wallets and mark the Wall Street firm’s first foray into plastic.

Emily Flitter and Jack Nicas of The New York Times had the story:

The new card would fit into the suite of consumer products that Goldman recently began offering, like a savings account and an array of personal loans through its consumer banking service, Marcus. Goldman hopes to use those new products to reduce its reliance on trading revenue in the years to come.

The card could help Goldman insert itself into the lives of iPhone users, who represent a far broader swath of consumers than the company now serves, and eventually open them up to the other services the bank has to offer.

“This seems to make sense,” said Devin Ryan, an analyst at JMP Securities, “It’s just one piece of a much bigger puzzle that is forming that is Goldman Sachs’s consumer finance business.”

Part of Goldman’s recent consumer buildup has focused on credit cards. In December, the bank hired a team from a credit card start-up called Final. In April it bought a mobile app, Clarity Money, that helps users search for the best credit card deals. It has been downloaded a million times.

Hugh Son of CNBC.com reported that Goldman is pushing into consumer banking:

The move comes as investment bank Goldman continues to make a push into consumer banking activities such as deposit-taking and personal loans. It will displace London-based Barclays as Apple‘s financial partner for credit cards, the Journal said.

The card will be branded with Apple Pay, the technology giant’s mobile payment and digital wallet platform.

The move could address priorities for both companies. Apple is looking to boost revenue from things other than gadgets, and the payments space is in the midst of intense competition from banks and tech startups. Goldman is looking to diversify its revenue away from institutional areas like trading and investment banking with its push into areas of finance that touch ordinary consumers.

The partnership could also include Goldman offering in-store loans to Apple customers for the tech company’s products, the Journal said.

Sarah Gray of Fortune reported that Apple is trying to expand into services outside of retail:

In 2016, Goldman Sachs expanded into consumer banking with Marcus by Goldman Sachs, which offers financial services like personal loans. It also purchased the financial planning app Clarity Money earlier this year. A credit card would be another arm in the investment banking firm’s play toward consumer finance.

For Apple, the goal is to burnish other services outside of retail, according to WSJ.Apple Pay was launched by Apple in 2014, and though it has grown in users year-over-year, according to 9to5Mac, a 2018 report from the venture capital firm Loup Venturesestimates that only 5% of U.S. iPhones have Apple Pay activated.

Apple has had a rewards card with Barclays, which offered 0% interest and a limited APR of 0% for 6 to 18 months and Apple gift card rewards. The new card with Goldman Sachs will replace that, according to WSJ.