Apple is becoming more and more like a bank

It’s no longer fair to say Apple is dipping its toes into the financial services waters. It’s going for a full swim.

The tech company announced Thursday that holders of its Apple Card will soon be able to utilize a high-yield savings account through Goldman Sachs. And while interest rates weren’t disclosed, a typical Goldman savings account is currently paying an annual percentage yield 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% cash back on select purchases) on the card to the account. And, of course, Apple will allow them to transfer funds from other traditional banking accounts.

“Savings enables Apple Card users to grow their Daily Cash rewards over time while also saving for the future,” said Jennifer Bailey, Apple’s vice president of internet services, which includes 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, no minimum balance requirements, and no minimum deposits, the Apple/Goldman partnership could well be an appealing alternative for consumers as they look for ways to combat inflation and make more off their money. It’s a shrewd move by Apple as concerns grow about a possible looming recession, but it’s hardly the company’s first.

Last month’s release of iOS 16 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.

The feature lets people split a purchase into four payments over six weeks—with zero interest or fees—on any in-app or online purchase that uses Apple Pay at checkout.

Meanwhile, Apple is also partnering with Square on a new payment system that lets you send money to someone by tapping your iPhone to theirs. Wallet, meanwhile, will let you track online orders that 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 is supposed to make credit checks on loan applications more informed.

The moves, so far at least, seem less about making money for Apple and more about locking people firmly into the Apple ecosystem as Google and other competitors look to chip away at Apple’s dominance in the mobile wallet space. That’s an area that, in the grand scheme, 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, at present, has a commanding lead among mobile wallet companies, controlling nearly half of all transactions. Google Pay, by comparison, makes up 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 one, holding everything from your finances to your driver’s license and even a digital version of your car key. But with Thursday’s announcement, it might have expanded its ambitions, looking to add people’s bank accounts to their iPhone as well. 

Correction, October 13, 2022: A previous version of this story misstated Apple’s relationship with Square on its Tap to Pay feature for iPhone. The companies are partners on the project.