Apple Inc. (NASDAQ: AAPL) is reportedly planning to release a new credit card that works with the iPhone as part of a partnership with Goldman Sachs (NYSE: GS). According to sources familiar with the matter, the companies are planning to roll out the new card this spring. The card was first reported to be in the works last May.
The new credit card will reportedly be paired with new features in Apple’s wallet app, which allows iPhone users to link bank cards to their phone and use Apple Pay to pay at retailers. Those features would include setting spending goals and managing account balances. Rewards are expected to be linked to use of the card, with card users earning around 2 percent cash back on most of their purchases. Users will be able to track their rewards in the app.
The new partnership comes as both businesses continue to focus on diversifying their revenue streams. This will be the first consumer credit card launched by Goldman Sachs, which has traditionally courted the ultrarich and major corporations for its client base. The traditional areas of its business, like trading and investment banking, have suffered years of lackluster performance.
Goldman Sachs entered the retail-banking space about two years ago with the launch of digital retail bank Marcus. Marcus is aimed at regular consumers, offering savings accounts and loans at competitive rates. Since its launch in 2016, the bank has taken in more than $35 billion of deposits.
Apple has been having difficulties with its iPhone business as smartphone adoption has appeared to peak it its primary markets. Increasing revenue from things other than gadgets seems to be the way to growth for the company and the payments space is ripe for disruption. Having its own credit card would also allow Apple to take a bigger cut of iPhone credit card purchases through Apple Pay.