For years, Apple Inc. has been asking big U.S. banks to allow their customers to view deposit-account balances on its digital wallet, according to people familiar with the matter. The banks largely have declined, the people said, wary of ceding the customer experience to Apple and becoming simply the financial plumbing behind the scenes.
But Goldman has been happy to oblige.
A relative newcomer in consumer banking, the Wall Street giant has expanded and extended a partnership with Apple that began a few years ago with a credit card. Goldman is working on a high-yield savings account for Apple cardholders. It is also going to provide some of the back-end services that will allow Apple to offer “buy now, pay later” plans.
The partnership reflects Goldman’s revamped approach to consumer banking, a business it launched a few years ago to great fanfare that has yet to turn a profit. The bank has abandoned plans to build a full-service consumer bank in favor of providing banking services to wealth-management customers and through partnerships with companies such as Apple.
Banks and technology companies have been in a heated race for years to build a financial super app—one that offers banking, payment and investing services. Facebook, now known as Meta Platforms Inc., failed to build a futuristic cryptocurrency network. Google last year abandoned a plan to pitch checking accounts to users of its digital wallet.
“There’s absolutely an opportunity to reshape how people interact with financial institutions,” said Bob O’Donnell, president at TECHnalysis Research, a market-research firm. “Everything is done on the phone, so why wouldn’t the financial management piece also happen on the phone?”
Apple, piggybacking off its ultra-popular iPhone and Apple Pay service, is trying to pull ahead of the pack. The idea is to build a technology ecosystem that satisfies people’s many daily financial needs all in one place.
“It’s driving loyalty and engagement with the iPhone and maybe the iPad—it’s about the Apple ecosystem,” said Ron Shevlin, chief research officer at Cornerstone Advisors, a banking and fintech advisory firm.
But Apple can’t do much without the cooperation of banks like Goldman. In October, the companies unveiled plans for the high-yield savings account where Apple Card customers would be able to deposit funds and earn interest on their cash-back rewards. The account will be separate from Goldman’s own high-yield savings account, known as Marcus.
Apple also sees big potential in buy now, pay later plans—whose popularity has soared in recent years. Apple will connect to merchants through the Mastercard Inc. network. Goldman will serve as the sponsor, essentially issuing a card number that merchants will receive when consumers pay using the service.
The arrangement is in keeping with Goldman’s broader plans to expand into payments. The bank has sought to position itself as a technology player behind the scenes, according to people familiar with the matter, rather than a brand in its own right.
That is just what Apple was looking for when it sought a bank partner for its credit-card program a few years ago. The tech giant wanted more control over certain aspects of the program than many issuers were willing to give, people familiar with the matter said. For example, people apply for the card through Apple; the application isn’t available on Goldman’s website, though the bank is responsible for evaluating potential borrowers.
Apple’s insistence on controlling the customer experience has turned off other banks.
Apple Pay, for example, is the default tap-to-pay option for the iPhone. That has prevented banks from launching or growing their own payment wallets. JPMorgan Chase & Co. shut down its Chase Pay service last year, in part because of the iPhone limitations, people familiar with the matter said. Capital One Financial Corp., too, has pulled plans for its own wallet, in part because of Apple Pay, the people said.
A recent proposed class-action lawsuit brought by several credit unions accused Apple of violating antitrust law in restricting access to technology that could be used to enable other wallets on Apple devices.
Banks also have been trying to keep Apple Pay from becoming a bigger player in payments, including with the recent rollout of tap-to-pay debit and credit cards that compete directly with the service. The decision to introduce the technology was partly spurred by a desire to make it as easy to use cards in stores as it is to use Apple Pay, according to people familiar with the matter.
Some of the same banks that rushed to work with Apple Pay when it first rolled out in 2014 now regret that decision, The Wall Street Journal previously reported, because of the fees they pay on card purchases made using the wallet.
