One company has a devoted customer base teeming with wealthy, well-traveled young adults. The other is a financial powerhouse with few offerings for everyday consumers.
Now they are trying to join forces.
Apple and Goldman Sachs have been working for months on a new credit card product that would bear the Apple Pay brand, according to two people familiar with the companies’ talks. They spoke on the condition of anonymity because the talks were continuing.
The product would be Goldman’s first credit card offering and could help the bank’s effort to expand its consumer products. For Apple, the deal could help it extend its Apple Pay brand, the technology giant’s digital payment service.
The two companies have not settled on all the details, said one of the people.
Andrew Williams, a spokesman for Goldman Sachs, declined to comment. Christine Monaghan, an Apple spokeswoman, also declined to comment.
The partnership was reported earlier Thursday by The Wall Street Journal.
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’ 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 startup 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 1 million times.
Apple already has one branded credit card, offered by Barclays. That card allows users to earn points they can use for Apple gift cards or for financing the purchase of new Apple products.
It was unclear what, if any, benefits the new card would give consumers. But adding the Apple Pay branding would be a change. Apple introduced Apple Pay in 2014 as a way to pay for everything from a sandwich to a laptop with the wave of a smartphone instead of the swipe of a card. In effect, users upload their credit- or debit-card information to Apple and then use their iPhone, Apple Watch or other Apple products to pay for goods in stores or online. Apple takes a small cut of each transaction.
Apple executives have said they aim for Apple Pay to eventually replace cash and plastic as the primary way to pay. But Apple’s payment service has a long way to go. One of the people familiar with the discussions between Apple and Goldman said that taking Apple Pay into the physical world would help expand its reach. With an Apple Pay credit card, loyal iPhone users could use Apple Pay even in places that don’t yet accept digital payments, the person said.
The research firm Loup Ventures estimated last year that just 13 percent of active iPhones had activated the service. And Apple Pay is not even the most popular mobile-payment service. It faces stiff global competition from Samsung Pay and Google’s Android Pay, as well as Alibaba’s Alipay and Tencent’s WeChat Pay in China.
Goldman, too, would face a crowded field, where competitors have recently learned that making money from credit card loans is not easy. JPMorgan Chase reported a $200 million loss following the introduction of its Sapphire Reserve card, after customers rushed to take advantage of a generous sign-up bonus that accompanied it.
“It’s such a competitive credit card marketplace right now, especially for higher end folks,” said Matt Schulz, a CreditCards.com analyst. “The Apple Barclays card isn’t anything that’s going to turn that person’s head, in terms of making them want to get a card. It’ll be interesting to see what these two brands can do to create something that might make more of a splash.”
