Apple and Goldman Sachs may soon issue a credit card together

The Wall Street Journal reports that the iPhone maker from Silicon Valley and the Wall Street stalwart are mulling over the idea of jointly issuing a credit card to Apple users.

Quoting people familiar with the situation, the paper claimed that Apple and Goldman Sachs may start a trial of the card on their own staff in the coming weeks before it is launched later in the spring. A similar partnership was earlier reported in May 2018 by the same paper.

If this does happen, it will not be the first time Apple takes part in card issuing. The company has already partnered Barclays to issue Barclaycard with Apple Rewards, by which users can earn points from purchases made at Apple or elsewhere, which can then be converted to Apple Stores or iTunes Store coupons.

Nor is Apple the only internet company to issue bank cards. Amazon, for example, has partnered with multiple banks (including RBS and NatWest in the UK) to issue different kinds of credit, debit, cash-back and other types of cards with different benefits.

Where the Goldman Sacks card will be different, according to the WSJ article, is its tighter integration with features offered by the Apple Wallet app on the iPhone and the iPod Touch.

By now, users of Apple Wallet can store in the app “credit, debit, and prepaid cards, store cards, boarding passes, movie tickets, coupons, rewards cards, student ID cards” etc. Then users can use “passes on your iPhone to check in for flights, get and redeem rewards, get in to movies, or redeem coupons. Passes can include useful information like the balance on your coffee card, your coupon’s expiration date, your seat number for a concert”, and so on.

The speculated card is said to work with these Wallet functions as well as with upcoming features. For example, Wallet may keep spending limits, track rewards, encourage users to pay down their credit card debt, and manage balances. These will not be fundamentally new ideas. Apple Watch is already attempting to improve the user’s physical wellness, and the recent update on iOS has added notification of user’s screen time.

This may bring addition benefit to Apple, at a time when its Products business is slowing down while Services is growing to be more important. As a concrete example, Apple could get higher commission fee from transactions on its own cards then on those made through Apple Pay linked to cards issued by other institutions.

For Goldman Sachs, on the other hand, the main driver would be the iOS users. Traditionally an investment and wholesale bank, Goldman Sachs only recently opened an online retail banking business in the shape of Marcus by Goldman Sachs. A joint credit card would be a good channel to access the iPhone users, which are believed to be higher spenders among smartphone users. Eventually, WSJ claimed, the card may expand to offer personal loans, wealth management services, and other financial products, which would be closer to Goldman Sachs’ heart.