A report from the WSJ claims that Apple and Goldman Sachs are working together on launching a credit card later this year.
Now for most people, Apple is a technology company that designs, develops, and sells consumer electronics, computer software, and online services. Goldman Sachs on the other hand deals in multinational investment banking and financial services. Hence, coming up of both of these companies to form a JV is a rather surprising turn of events.
So why are these two giants in their respective domains coming together ? Well, for one, both are facing declining revenues in their core businesses. While Apple’s hardware sales are on a steep decline curve, Goldman Sachs too is facing headwinds in the investment banking business. Apple saw over $300Bn being eroded from its market cap during the recent quarterly earning call.
However, the only positive from Apple’s earnings call, was the fact that its services business continues to shine. With this possible collaboration with GS, Apple is expecting to increase revenues from the services business, most notably from Apple Pay.
Goldman Sachs too, started up the Marcus bank in 2016 in a response to declining securities trade work. This credit card partnership could most likely benefit Goldman Sachs if it can use Apple’s historically loyal customers.
The credit card will be integrating some of Apple pay’s features along with Apple’s IOS. The card could also be a good push on people to actually use their Apple devices to use Apple pay since most cards will be compatible with Apple devices.
Another innovative idea that may be launched with the credit card is, the Apple wallet. This would allow the user to set up spending goals to which they can work to, get notifications about spending habits and track the rewards that come with the spending.
Although the credit card is a good business strategy for the two companies involved, it does include the risk of infuriating Apple’s existing business partners. The company — if this GS deal goes through — will obviously not be providing the same integration to other banks.
It is still unclear as to when this product will be launched. There is no trial date either. But WSJ has claimed that the launch may occur in early spring and even expand its outreach to various other categories of banking services but this has not been confirmed so far.