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Tech Giants Race For Credit Card Dominance

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The next evolution in credit cards is very likely to be a Golden Apple, with Apple Pay giving up Barclays for Goldman Sachs and a shiny new credit card to come out of the marriage—one featuring the logo of a company that’s made more profit in three months than even Amazon has made since its inception.

The upcoming Apple-Goldman Sachs joint credit card will be a significant move for both. For Apple, it means taking Apple Pay much deeper into consumer pocket-books. For Goldman, it’s a plastic debut that couldn’t possibly have a better partner.

According to the Wall Street Journal, Apple will end its alliance with Barclaycard, and the new Apple-Goldman credit card should be released soon—possibly by early 2019.

And of course, it will bear the Apply Pay brand and will replace the current Apple Rewards credit card, with Goldman as creditor instead of Barclays.

The details of the terms of and benefits remain unknown, but most expect it to be much more consumer friendly than the old card, which did offer no-interest promotional periods on Apple products, but for everything else, it was an expensive piece of plastic, with interest rates ranging from 15.5 percent to 28.49 percent, depending on credit scores.

In late April, Apple ended this relationship in United Kingdom.

Media reported earlier that Apple is working with Goldman on a cheaper financing deal for new customers. That might include Goldman splitting the profits from its merchant fees with Apple. Apple currently takes a 0.15 percent cut of every Apple Pay transaction, but with its new Goldman Sachs credit card, it would take more than 0.3 percent. 

Apple Pay was introduced in 2014, but it wasn’t as hearty a welcome as the tech giant had hoped for, with mobile payments slow to take off in the United States, although they are growing. Related: Precious Metals May Have Hit A Temporary Ceiling

Apple CEO Tim Cook recently asserted that Apple Pay had doubled account activations and tripled transactions year-over-year. However, according to estimates by Loup Ventures, just 13 percent of active iPhones had activated the service.

What investors should like about the new card with Goldman is the die-hard loyalty of Apple  customers, and there is likely to be real benefit for anyone who wants to purchase Apple products.  

But it could also be a boon for Goldman, which would be making its credit card debut with this move and will be looking to expand its consumer products as a result.

Goldman Sachs has recently amped up its offerings for consumers, through its consumer banking service, Marcus, including personal loans and checking accounts with no minimum deposit required.

But this won’t all go down without some major competition in the credit card space. Another tech giant, Amazon, has recently debuted its own credit card. Uber has, as well.  

And Barclays, for that matter, won’t miss Apple that much. It’s teamed up with PayPal as competition in the global payments industry hits fever pitch.

By Michael Scott for Safehaven.com

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