According to the Wall Street Journal, the tech company and the bank are teaming up to create a joint credit card.
Apple and Goldman Sachs have been working for months to create a new credit card that would bear the Apple Pay brand, according to people familiar with the companies talks.
For Goldman Sachs, this unusual partnership would be the bank’s first foray into the world of credit card offerings, and the move would help the bank to expand its consumer products. And while Apple offers the Apple Pay credit card in conjunction with Barclaycard, so Apple customers can get “special financing” on their products, the two companies have not settled on all the details, reports News Now.
Both companies reinventing themselves
Apple has been taking its reinvention seriously recently, having discovered services – as opposed to software and devices – has become a larger part of the tech company’s revenues. Payments are part of Apple’s services portfolio, especially after the development of its Apple Pay that turned a phone into a credit card.
And according to Fortune, “Apple’s payments ambitions are of a piece with its music and app sales and subscriptions business: Charging a few cents or a few dollars to the owners of each of its billion-plus devices is a large opportunity.”
Goldman Sachs has also been reinventing itself, especially after weathering the 2008 financial crisis, Goldman Sachs actually became a bank, instead of a financial institution, primarily because federal regulators forced it to.
Goldman Sachs has been courting consumers, with offerings of savings accounts and an array of personal loans through its consumer banking service, Marcus Brand, a nod to its founder, Marcus Goldman. So being able to insert itself into the lives of iPhone users would certainly add to the bank’s customer base.
A word of warning?
Market Watch reminds consumers that the “special financing” being offered by the Apple Pay credit card with Barclaycard, can be expensive for the unwary, and the new card could carry the same risks. They remind people to be aware of what is called “deferred interest,” something many consumers misunderstand.
“Deferred interest programs are a popular choice for consumers who need to purchase expensive items like refrigerators and dishwashers but don’t have the money or savings,” said Nessa Feddis of the American Bankers Association, according to CNBC. “They allow them to make the purchase when they need to and spread the payments over time without having to pay any interest. The overwhelming majority repay within the deferred interest period and benefit from a free loan.”
But there is a catch – A single late payment or a failure to pay a balance by a certain deadline can trigger sizable financial penalties. This means the consumer will owe interest dating back to the original purchase, and additionally, the interest rates can be very steep, depending on your credit rating.
