How Far Will Apple Move Into Banking?

The Apple/Goldman Sachs joint efforts to make inroads into consumer banking continue.

And for Apple, the debut of a Goldman Sachs savings account — geared to Apple Card holders — is a bid to cement the ecosystem that takes the tech giant ever further afield from hardware.

As noted in this space on Monday (April 17), the new account offers a 4.15% APY, which is at least 10 times the national average.

The account spotlights the partnership with Goldman, which has been dialing back its consumer business. Marcus, the white-shoe Wall Street mainstay’s digital bank, has been a money loser. But recent Goldman earnings reports and company presentations show that the company expects its Platform Solutions to break even by 2025. Platform Solutions includes the GreenSky and the credit card (Apple and General Motors are partners here) operations. We’ll get more color on where and how Goldman is refocusing its consumer efforts when it reports earnings this week.

For Apple, launching the savings account is a push into territory where Goldman had also been staking a claim, with its own high-yield savings offerings (a bit lower than Apple’s rate, with a 

3.9% APY). And other digital-only players have been competitive in their own jockeying to lure consumers with yield (Ally, for example, offers a 4% APY).

Apple Wallet at the Center

Apple’s savings account can be directly managed via the Apple Wallet, and building savings into the card/wallet function would conceivably lead to cross-pollination. 

Daily Cash (cash back rewards) earned through using the card is deposited into savings; conceivably, the savings could be used to buy new Apple offerings. The wallet? That would be a springboard to it all. We’ve seen recent initiatives to broaden the use case for and use of Apple Wallet, as the company recently rolled out its Apple Pay Later feature in the U.S.

Forging a services ecosystem with finance and payments as critical components is no sure bet. 

PYMNTS has estimated that in the eight years since its launch, 44% of in-store digital wallet transactions are done with Apple Pay.  

But in terms of the overall landscape, that slice of on-premise commerce is relatively miniscule, at 2.4%. The payment method, per the data, shows that Apple Pay has captured a 6% “share” of eligible transactions.

In the most recent earnings report, Apple’s own numbers and commentary showed some traction surrounding the Services segment: 

$20.8 billion in services was underpinned by double-digit revenue growth from App Store subscriptions and what CEO Time Cook has said were “all-time revenue records” in categories including payments. Chief Financial Officer Luca Maestri said that transacting accounts and paid accounts grew double digits year over year, setting records for each. However, Apple expects services to “face macroeconomic headwinds in areas such as digital advertising and mobile gaming.” Paid subscriptions, at more than 935 million, showed a gain through 2022.  

Apple’s partnership with Goldman shows a willingness to strike partnerships as it scales more broadly into services, credit and payments and consumer finance. High-yield savings is but the latest iteration of those efforts.