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Apple is starting to look more and more like a bank

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It is no longer fair to say that Apple is dipping its toes in the waters of financial services. It involves a full dive.

The tech company announced on Thursday that Apple Card holders will soon be able to use a high-yield savings account through Goldman Sachs. And while interest rates have not been disclosed, a typical Goldman savings account currently pays an annual percentage of more than 2%compared to 0.04% at Bank of America.

Users can automatically transfer their daily cash (an incentive of up to 3% cashback on certain purchases) on the card to the account. And of course, Apple will allow them to transfer money from other traditional bank accounts.

“Savings allow Apple Card users to grow their Daily Cash rewards over time while saving for the future,” said Jennifer Bailey, Apple’s vice president of Internet services, including Apple Pay and Apple Wallet. in a statement. “[It’s] another easy-to-use tool designed to help users lead healthier financial lives.”

With no fees, minimum balance requirements and minimum deposits, the partnership between Apple and Goldman could be an attractive alternative for consumers looking for ways to fight inflation and get more out of their money. It’s a smart move by Apple as concerns grow about a possible looming recession, but it’s not the company’s first.

The release of iOS 16 last month brought new features to the wallet app, including a “buy now, pay later” option designed to attract more users to Apple Pay. That put Apple in direct competition with FinTech companies, such as PayPal and Affirm.

This feature allows people to split a purchase into four payments over six weeks — with no interest or fees — for any in-app or online purchase that uses Apple Pay at checkout.

Meanwhile, Apple is also working with Square on a new payment system that allows you to send money to someone by tapping your iPhone on theirs. Wallet, meanwhile, lets you track online orders you’ve made with Apple Pay.

And in March, the company sparked more speculation about its FinTech ambitions when it bought fintech startup Credit Kudos, which develops software that should make credit checks on loan applications more informed.

The moves, so far, seem to be less about making money for Apple and more about pinning people down in the Apple ecosystem as Google and other competitors look to take away Apple’s dominance in mobile wallets. That’s an area that, in general, is still a fairly small part of the financial services industry, but is growing as people become more and more attached to their phones.

Apple currently has a leading edge among mobile wallet companies, almost half of all transactions. In comparison, Google Pay accounts for 17% of the market. Samsung, PayPal and Walmart are competitors with significantly smaller market shares.

Ultimately, of course, Apple wants its digital wallet to replace your physical wallet, with everything from your finances to your driver’s license and even a digital version of your car key. But with Thursday’s announcement, it could expand its ambitions and also add people’s bank accounts to their iPhone.

Correction, October 13, 2022: An earlier version of this story misrepresented Apple’s relationship with Square on the Tap-to-Pay feature for iPhone. The companies are partners in the project.

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