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Tuesday, May 15, 2018

Apple prepares a credit card with Goldman Sachs

Por Jade

The technological giant is expanding through finance throughout Apple Pay, which allows users to charge their debit and credit cards in a digital wallet and pay with their cell phone. Goldman Sachs Group Inc. will issue the new joint-branded credit card from Apple Inc., according to a person familiar with the matter, now that the investment bank deepens its campaign to penetrate consumer finance. The arrangement of Goldman Sachs with Apple would replace the previous agreement that the technology giant had with Barclays Plc, said the person, who asked not to be identified by discussing internal plans. The two companies are still developing the product, according to the source.

In this way, Apple will replace a card issuing company with which it currently collaborates, the Barclays bank. According to the information published by The Wall Street Journal, the new card could be issued at the beginning of 2019. It is believed that this fact could help both entities overcome the problems they have recently faced in the main spheres of their business. Since the sales of Apple's new phone models are slowing, the company emphasizes services such as mobile payments, subscriptions for music streaming and App Store service sales, the article stresses.

Thus, it turns out that Apple Pay, which generates the income of each transaction, is considered the main contributor, but the adaptation by the customers was slower than expected by the executives. According to the newspaper, Goldman Sachs now deals with consumer loans to compensate for the drop in the stock market, where income has been reduced by two-thirds since the financial crisis. Through the collaboration of the two companies, Goldman Sachs will offer loans for consumers of Apple products, who buy smartphones and other devices of the brand.

In addition, Apple may benefit more from payments through mobile devices if users use the card for online purchases. Currently, when a person pays for their purchase using their digital account at Apple, regardless of which credit card they have, the Cupertino company receives only 0.15% per transaction. The introduction of the new card could double that income. Apple and Goldman Sachs have not yet specified the final conditions for the card's launch. Still, they continue estimating the advantages that would propitiate the same, so much for the companies, as for the users. Goldman Sachs plans to enter more strongly into the world of credit cards with two brands, a space that has become increasingly competitive as banks increase the rewards to win business with retailers.

The company is expanding into consumer finance with its new unit, Marcus, an initiative headed by Harit Talwar, the former director of the Discover Financial Services card division for the United States. Recently, Goldman Sachs hired Scott Young and Anand Sivadasan, who had negotiated partnerships to create joint-brand credit cards for Citigroup Inc., and Shailesh Mendonca, a digital marketing executive at Capital One Financial Corp. Spokespersons for Goldman Sachs, Apple and Barclays declined to comment. The Wall Street Journal reported on the new partnership on Thursday, adding that a card could be released next year.

Barclays offers holders of their cards three points for every dollar they spend on Apple products, two points for every dollar spent in restaurants and one point for every dollar spent on other purchases. For purchases over US $ 999, Barclays also offers 18 months of interest-free financing. Apple is expanding its finances through Apple Pay, which allows users to charge their debit and credit cards in a digital wallet and pay for it with their cell phone. Since it opened in 2014, the service has attracted some 86 million customers, according to Juniper Research.

Last year, the technology giant launched Apple Pay Cash, a platform of payments between people that allows Apple to compete with Venmo, of PayPal Holdings Inc. Traders are slow to adopt Apple Pay; only 35% said they accepted the service in a survey conducted in 2018 by Kount. This figure compares with 64% of merchants who said they accept PayPal, considered the leader in digital wallets with 237 million users. Both companies already talked in February about the possibility of Goldman financing purchases of Apple products, according to The Wall Street Journal. Given the history of the credit card with Barclays, it seems unlikely that the future joint product with Goldman Sachs will be offered outside of the United States.