The Wall Street Journal reports that Apple might be launching a new credit card, in partnership with Goldman Sachs, later this year. WSJ’s sources claim that the credit card will launch with deeper integration with Apple’s Wallet app on the iPhone, in comparison to other credit cards. Users would be able to set spending goals, manage balances and track their purchase rewards. It’s reported that the card will offer 2% or more cash back on the purchase of Apple products along with other bonuses. As per WSJ, the credit card will use Mastercard’s network and is expected to undergo internal testing in a few weeks, before a launch in spring.
Apple and Goldman Sachs did not comment on the news. However, it is observed that Goldman Sachs has invested $200 million in the project. The company is working on building an internal system to manage payments and is adding customer-support call centers.
This is the first venture into consumer finance for both Apple and Goldman Sachs. It seems like a match made in consumer banking heaven because this partnership is set to bring new dynamics in the market. Sources report that Apple choose Goldman Sachs over well established competitors like JPMorgan Chase and Citigroup because its a new comer in consumer finance and is willing to build features that Apple wants to offer, and is not anchored down by any existing policies with other credit card partners.
There is a lot of speculation on what pushed Apple to venture into consumer finance. With its current Apple Pay product, Apple already earns a small percentage on users transactions via the service. Maybe the company sees more potential to earn a larger share of capital by offering a credit card of its own. Having said that, the decline in iPhone sales may also be a factor to branch out to other means of revenue generation. Similarly, Goldman Sachs may see this as an opportunity towards redemption after experiencing set backs in trading and investment banking operations.
The alleged features of the new credit card also seem beneficial for consumers. We will have to wait to see if other financial products and services are offered by the duo like wealth management service and personal loans.