Photo: Apple Inc.
Apple (AAPL) and Goldman Sachs’s long-awaited credit card is only weeks away from launching. This product is for sure a result of fierce and high-stakes development process for the Silicon Valley giant and the Wall Street “ol’ faithful”.
The Apple Card should be launched in the first half of August, meaning on schedule for the summer release date that Goldman Sachs CEO David Solomon first announced in March.
The usage should be maximally simplified. People who own an iPhone will be able to sign up for the card via the Wallet app, which will have built-in Apple Card support as part of the latest iOS 12.4 update.
For Apple, this product is one of their online service portfolio that will encourage current iPhone users to continue using Apple products. For Goldman Sachs, on the other hand, it represents the highest-profile product in a growing consumer push for the investment bank.
Apple is handling the user-facing software product and Goldman Sachs is handling the back-end by providing Apple with software tools called APIs for the financial services the product uses.
Companies divided their work in the way that Goldman Sachs already has dozens of people working on the product out of its Manhattan headquarters, plus other dedicated employees in satellite offices. The Apple side of the project is managed by the company’s Apple Pay and Wallet app teams.
The card would be used through the iPhone’s Wallet app, but there will be also a physical titanium card for retailers who do not accept contactless payments. Also, what is interesting is the security measures both companies decided to introduce. For example, there you won’t be any credit card number on the card. Instead, when you want to pay for something on a website that doesn’t support Apple Pay, you get a virtual card number in the Wallet app.
Also, the card will be providing a pretty sophisticated software interface to track both balance and purchases. It also has several consumer-friendly features that encourage users to avoid debt or pay it down quickly, which has led some people in finance to believe it will be difficult for banks to make money on the product.
Don’t forget that this will be the first credit card by Goldman Sachs and it will be a test of whether the bank can profitably scale up a consumer business in the late round of the U.S. economic expansion. Presumable target for the Apple Card are millennial borrowers who are falling pretty much behind on credit card debt by the most since 2011.
The Apple Card will be offering 3% cash back for purchases made directly with Apple (including Apple Store purchases, iTunes, App Store and subscriptions), 2% via the virtual card in the Wallet app and 1% when using the physical titanium card. The Card will have no fees, and cash back will be delivered daily.
Together with launching the Apple Card this summer, the company is expected to launch its Apple TV+ video streaming service and its Apple Arcade gaming subscription later this year.
At the time of writing AAPL stock was up for 0,35% to $207.74. As Q2 earnings season heats up, all of Wall Street is watching the stock closely to see how the technology powerhouse performs amid slowing iPhone sales and persistent U.S.-China trade war worries.