Banking giant Goldman Sachs and Apple are partnering to issue a credit card.
Exact details of the credit card aren’t available yet, but as reported by The Wall Street Journal, the card could help break Goldman Sachs into the credit card space and help expand the brand for Apple’s mobile payment tool, Apple Pay.
Apple currently has a credit card with Barclays that offers special financing to cardholders who use the card to pay for Apple products within the first 30 days of opening the account. According to Marketwatch, the new Apple–Goldman Sachs card could work the same way, though consumers will have to wait for the official announcement to confirm the card’s terms and benefits.
What does this mean?
An Apple–Goldman Sachs credit card may help speed up the slow growth of mobile payments in the U.S.
Despite many new phones having mobile payment capability, a PwC survey of 1,000 American consumers showed that only 42% have used some form of mobile payment at least once. Compare that to China, where 95% of Chinese consumers surveyed reported having used a mobile payment.
Why does this matter?
Why are mobile payments so important? Security and preference.
Mobile payments may offer enhanced security over physical cards. When you make a transaction using a mobile wallet, a computer-generated number stands in for your actual account number. The payment processor matches the generated number with your actual account number and then the charge is processed.
This is important because your real card number isn’t transmitted to the payment processor, which makes hijacking credit card numbers from a retailer’s database near impossible.
But it isn’t all about security. Many American consumers love spending money with their mobile wallets.
Data show that 40% of mobile payment users surveyed by PwC said that it’s their preferred payment method, and that they’re more likely to shop with a retailer who offers mobile pay. Heads up, though — 36% of consumers surveyed said they spend more money when using a mobile payment.
Bottom line
Once the credit card from Apple and Goldman Sachs launches, it may have a significant impact on how Americans pay for everyday purchases — even if they don’t apply for the card. If mobile payment continues to break into the American mainstream, increased use of mobile payments could mean less fraud and, potentially, easier spending for everyone.