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Apple Pay credit cards on their way

May 11, 2018

Not satisfied with just being in customers' pockets, Apple now wants to be in their wallets too — in the form of a new credit card. It's a nod to an old payment system from one of the world's most innovative companies.

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Apple Pay
Image: picture-alliance/J. Arriens

Tech giant Apple is working with financial institution Goldman Sachs on a new credit card that would carry the iPhone maker's digital wallet logo, according to a report Thursday in The Wall Street Journal.

The news comes as Apple increasingly focuses on growing revenue from online services and content and moves away from its dependence on expensive equipment. At the same time Goldman Sachs, best known as an investment bank, is seeking to make more money from retail banking operations, an area it entered a mere two years ago.

A joint credit card bearing the Apple Pay brand could launch early next year, and replace a rewards-card partnership Apple now has with Barclays, according to the report. Apple declined to comment on the story, which cited unnamed sources close to the matter.

Money is money

Apple, which still gets most revenue from iPhone sales, reported a hefty rise in earnings during the first three months of this year, alleviating worries about the iPhone's prospects and a hit from US-China trade tensions.

Read more: Times change but German obsession with cash endures

A 31 percent rise in Apple's services business to $9.2 billion (€7.7 billion) was credited to revenue gains from Apple Pay, Apple Music and other non-device programs. Analysts praised a big jump in revenues in the company's services business, which is seen as an important element of diversification away from having revenues only tied to gadgets.

Goldman Sachs acquired personal finance startup Clarity Money last month. The free app uses artificial intelligence to help people manage their finances.

A disruption game

Only this week another banking giant Deutsche Bank announced that it would launch a joint project with the International Air Transport Association (IATA) to test a new payment model. The group says that the industry pays credit card companies around $8 billion a year in fees resulting from ticket payment processing.

In a direct challenge to existing credit cards, the new system will work directly through banks. The system will focus on web-based ticket sales and is scheduled to be rolled out across Europe from the end of 2018. Germany's flag carrier Lufthansa will reportedly be one of the first to use the system; convincing passengers though — perhaps through incentives or discounts — to use the new system will be the hard part.

tr/jh (AFP, dpa)