Apple Inc and Goldman Sachs Group Inc are joining forces in the consumer credit business, launching the Apple Card credit card for iPhones. The card is tied to Apple Pay, a service that lets people load banking information and pay in stores like Starbucks or use it for purchases online. It works globally where Apple Pay is accepted, lets users track spending in the Wallet app, and focuses on transaction privacy. The card also includes a cash back program for rewards, including 2 percent cash back on all Apple Pay purchases and three per cent on Apple Store and services like the App Store.
The card excludes common charges like annual, foreign-transaction and late fees, Jennifer Bailey, Apple’s vice president of Apple Pay, said. Apple and Goldman Sachs won’t share user data with partners and advertisers. Apple will also offer titanium credit cards with laser etching for places where Apple Pay isn’t accepted.
Apple and Goldman are entering the intensely competitive field of consumer credit, where banks have been shelling out costly rewards to encourage consumers to spend through their cards. Banks, which collect a fee from merchants each time a consumer swipes their card at checkout, have been eager to grow their card businesses in recent years and have benefited from low default rates.
Apple isn’t new to electronic payments. Apple Pay Cash is a virtual debit card of sorts that lets users transfer money over iMessage and can also be used as a tap-to-pay tool in stores. Apple partnered with Green Dot Bank for that service and has long offered a credit card with Barclays for Apple hardware purchases.
Still, the push into consumer credit cards is a major advancement for Apple’s payment-related initiatives. Apple made a big splash with Apple Pay in 2014 when it struck partnerships with payment networks like American Express and Visa.