Goldman Sachs, Apple and Credit Card Technology

For the past month or so the big buzz in the financial community is the news that Goldman Sachs will be collaborating with Apple in launching the Apple Card. The U.S. investment bank, which seeks to expand its client base, sees the Apple credit card as a vehicle that can make that happen. The Apple Card will become available to American customers this summer and is planned to go international afterwards.

What’s in it for cardholders is that they will be entitled to a three percent reward on Apple products. Apple sees that as good news as well, since it expects its sales will increase as a result.

Setting up a charge card network from scratch is no simple feat, so you’d assume that might deter a company like Goldman Sachs, which hasn’t dabbled in credit cards until now. But the opposite is true. A report published this week quotes Goldman execs as saying that its “absence of legacy business enables us to be innovative” and “more disruptive in a broader sense.” 

The reason, the report explains, is that the “absence of legacy business” means there is no legacy technology to adapt or replace. Goldman Sachs can deploy state-of-the-art processing and dispute resolution solutions immediately without having to wait for systems integrators and beta tests. 

The upcoming debut of the Apple Card, therefore, means that bells will be ringing at banks that are veteran issuers of legacy credit cards. If a competitor will soon be offering expedited service to its cardholders while they themselves are still employing slower legacy technology, their market share will inevitably decline.