Apple and Goldman Sachs are planning to offer an Apple Pay-branded credit card and in-store loans to Apple Store customers, the Wall Street Journal reports today. Expected to launch in 2019, the Apple-Goldman deal appears set to extend Apple’s profits from the lucrative financial services business, and mark the end of its credit card offering with Barclays, which started in 2005.
The Journal’s report says that “Apple and Goldman are still hashing out the terms and benefits of the planned card including the perks for customers.” Previously, Barclays offered interest-free financing for Apple devices as a benefit, with a perk of points that can be used to purchase Apple gift cards. Apple reportedly gave up a per-cardholder bounty of $100 or more per new account in order to offer the interest-free financing deal, but could change that arrangement with Goldman.
As of today, the Apple Pay service offers a variety of transaction options ranging from direct cash transfers using Apple Pay Cash to credit card purchases based on a user’s existing credit cards. Though it’s an all-digital service, Apple Pay Cash notably is represented within the iPhone’s Wallet app as a black card with a holographic-style rainbow pattern — a design that looks just like a real credit card. Bringing a similar card into tangible form could offer a new avenue for Apple Pay advertising and add new customers to Goldman’s two-year-old credit card business.
Beyond enabling users to have a physical Apple-branded credit card, the Goldman Sachs deal could give Apple an avenue to increase its take from transactions. The report says that Apple could more than double its current 0.15 percent transaction fee by switching to Goldman, while using its choice of Visa, Mastercard, or Discover to process transactions. Apple Pay Cash currently uses Discover, but Apple is said to have a long-standing relationship with Visa.
It remains to be seen how large of an impact the deal will have on Apple’s bottom line. That said, Apple’s services division has been one of its largest growth drivers in recent months, so it’s likely that the company is currently seeking the more aggressive possible terms across multiple partners and will continue to grow its cash pile as a result.