Apple Inc. AAPL 0.32% and Goldman Sachs GS 1.31% Group Inc. plan to start issuing this spring a joint credit card paired with new iPhone features that will help users manage their money. The card will be rolled out to employees for testing in the next few weeks and officially launch later this year, according to people familiar with the matter. The companies hope to lure cardholders by offering them extra features on Apple’s Wallet app, which will let them set spending goals, track their rewards and manage their balances, the people said. The Wall Street Journal reported last year that the companies planned to launch a joint credit card. It is a major push by Apple into the financial lives of hundreds of millions of iPhone users. It is also part of Goldman’s broader strategy to appeal to rank-and-file consumers. Apple and Goldman are entering a crowded field with little experience. Both are looking for new revenue sources as their bread-and-butter businesses struggle. As iPhone sales cool, Apple is turning to fee-generating services. It has apps that stream music, curate news stories and make mobile payments, and is teaming up with Hollywood studios to produce original TV shows. The company aims to boost its services revenue to $50 billion by 2020. Apple currently takes a small cut when iPhone users make credit-card purchases through Apple Pay. It would get a bigger slice of the swipe fees from its own card, some of the people said. Executives also hope the card will boost use of Apple Pay, which has been slow to catch on among users and merchants. Goldman launched an online consumer bank, Marcus, in 2016 to offset a decline in securities trading. Apple has a loyal following among wealthy, tech-savvy young adults whom Goldman hopes to turn into Marcus customers. The credit card is Goldman’s first, and a heavy lift. The bank is adding customer-support call centers around the country and building an internal system to handle payments. The latter project has a $200 million budget, people familiar with the matter said, a major investment at a time when the bank is trying to cut costs. Apple said iPhone revenue dropped 15% in the fiscal first quarter, causing a drop in both revenue and earnings amid a matured smartphone market and a slowdown in its service business. WSJ's Lee Hawkins reports. Photo by Justin Lane/EPA-EFE/Shutterstock The Apple Pay card will use Mastercard Inc.’s payment network, which is the second-largest in the U.S. after Visa Inc., some of the people said. Cardholders will earn cash back of about 2% on most purchases and potentially more on Apple gadgets and services, some of the people said. Banks including JPMorgan Chase & Co. have spent heavily to lure cardholders with travel points, airport lounge access and other generous perks. Neither Apple nor Goldman is eager to join that race, people familiar with the project have said. Instead, the companies are betting that Apple customers will use the card because it is better integrated into the iPhone. Engineers are working on new features for the Apple Wallet app that would encourage users to pay down their credit-card debt and manage their balances. Executives have discussed borrowing visual cues from Apple’s fitness-tracking app, where “rings” close as users hit daily exercise targets, and sending users notifications about their spending habits, for example flagging an unusually high grocery bill. Newsletter Sign-up The 10-Point. A personal, guided tour to the best scoops and stories every day in The Wall Street Journal. PREVIEW Goldman has been critical of the credit-card industry, positioning its Marcus loans as an alternative to higher-interest cards. “Borrowing on revolving credit perpetually and chronically is a little bit like eating mac and cheese and coke for lunch every day,” Harit Talwar, who runs Marcus, said in 2017. Executives must now walk a fine line between encouraging responsible borrowing and getting users to spend enough on the card to generate profits. By putting its muscle behind a Goldman-issued card, Apple risks angering banks whose cards account for the bulk of the transactions running over Apple Pay. Executives discussed making their new card the default in the iPhone’s digital wallet, but Apple’s contracts with banks prevent it from doing so, one person said. Goldman executives hope to eventually offer Marcus loans, wealth-management services and other products to Apple customers, people familiar with the matter said. Without bricks-and-mortar branches, the bank spends heavily on direct mail and paid referrals to bring in customers. The companies at one point considered creating a more ambitious financial offering that would provide financial management beyond the credit card, but Apple executives worried that tapping into people’s bank accounts would raise privacy concerns, people familiar with the matter said. Write to Tripp Mickle at Tripp.Mickle@wsj.com, Liz Hoffman at liz.hoffman@wsj.com and Peter Rudegeair at Peter.Rudegeair@wsj.com<doc-sep>Yes, the major public clouds offer a lot. But what you may not know are the limitations, and how open clouds make the difference. Elevate your enterprise data technology and strategy at Transform 2021. Apple’s March 25 media event in Cupertino is likely to feature not two but three separate new services. Beyond the widely expected launch of news magazine subscriptions and reveal of a paid video streaming offering, the company is expected to debut an Apple-branded credit card, Bloomberg reports today. Whispers of the Apple credit card — backed by Goldman Sachs — have been making the rounds since last May, when a report suggested that the companies were negotiating terms, including Apple’s split of transactions and possible customer perks for using the service. Today’s report says that the offering, code-named “Project Cookie,” is supported by a freshly tweaked Wallet app in iOS 12.2, and that Apple has invited payments industry journalists to the event. Apart from the convenience of full Apple Pay wireless and encrypted transactions, customer incentives to use the card remain unclear. Rewards cards commonly offer usage perks, such as points that can discount future purchases, a benefit Apple could use to increase sales at its own stores. The report also suggests that Apple is “racing” to make last-minute deals so it can launch its video service with third-party offerings while it works to complete its own TV shows and movies. Popular paid video channels such as HBO, Starz, and Showtime are all said to be in talks for deals, with “at least a couple” of agreements expected by the end of this week. Launch timing for the video service has remained ambiguous leading up to the event. Earlier reports suggested that Apple may only tease the offering ahead of a late 2019 launch but will bring A-list celebrities to the March event to show off its star power. Details of the news offering, likely to be called Apple News Magazines, have continued to leak since the company acquired a magazine subscription service called Texture last year. Yesterday, dialog boxes and hooks for the service were discovered in a beta release of macOS 10.14.4, apparently confirming an all-you-can-read offering backed by magazines such as Bon Appetit, Fast Company, and National Geographic. Collectively, the announcements are expected to dramatically expand Apple’s services business, which has grown to become a large part of the company’s revenue stream. Existing services contributed over $10 billion to Apple’s bottom line in the last quarter alone, and Apple could add another $10 billion annually just by getting 100 million video subscribers on the rolls with $100 yearly service fees — a realistic expectation within three to five years, according to one analyst. Apple’s event will be livestreamed on March 25 from its Cupertino campus. We’ll be covering the announcements live as they happen.<doc-sep>
Apple and Goldman Sachs are continuing to work on a project that could result in a jointly-produced credit card, one that offers extra functions in the Wallet app that may help users manage their spending and their accounts more effectively, without requiring a separate card-specific app. In 2018, Apple was said to be in discussions with Goldman Sachs for a possible Apple Pay-branded credit card, with a view to launch sometime in 2019. A new report suggests the collaboration is close to launch, with testing of a card by employees set to start in the coming weeks. The Wall Street Journal reports the card will offer users with extra functionality via Apple's Wallet app, which will display spending goals, rewards, and to help manage their balances, according to sources with knowledge of the project. The Wallet features are thought to help users pay down any credit card debt before it becomes an issue, along with the possibility of using notifications if spending veers away from normal patterns. There is also the suggestion that the "Rings" concept used for fitness on the Apple Watch could be borrowed for the project, though it is unclear what metrics would be monitored in this fashion. Using Mastercard's payment network, the second-largest behind Visa, the card will earn its users cashback of around 2 percent on most purchases, with potentially higher percentages when used for Apple goods and services. The card would be Goldman Sachs' first, and is reportedly costing a hefty amount to organize. The card project is said to have a budget of $200 million, with the bank adding customer support call centers and improving its internal infrastructure to handle increased numbers of payments. Apple Pay is already a revenue generator for Apple, with the company taking fees from transactions performed through the mobile payment platform. It is suggested by the report sources that Apple would get a larger slice of the transaction fees from its own card, boosting its Services revenues further.