As stocks soared in 2020 and consumers flocked to trading apps like Robin Hood, Apple And Goldman Sachs were working on an investing feature that would allow consumers to buy and sell stocks, according to three people familiar with the plans.
The project was abandoned last year as markets turned south, said the sources, who asked to remain anonymous because they were not authorized to speak on the matter.
The effort, which has not been previously reported, would have expanded Apple’s line of Goldman-powered financial products. Apple first partnered with the Wall Street bank to offer a credit card in 2019, then added buy now, pay later (BNPL) loans and high-yield savings account. The company said last month that savings account offerings had surpassed $10 billion in user deposits.
Representatives for Apple and Goldman declined to comment.
Apple CEO Tim Cook holds a new iPhone 15 Pro during the “Wonderlust” event at the company’s headquarters in Cupertino, California, United States, September 12, 2023.
Loren Elliott | Reuters
Apple was working on the investing feature during a time of zero interest rates during Covid, when consumers were stuck at home and spending more time and their record savings trading stocks, including meme stocks like Stoppage of play And AMCfrom their smartphones.
Apple’s conversations with Goldman began during this hype cycle in 2020, two sources said. Their work progressed, and an Apple investing feature was expected to roll out in 2022. One hypothetical use case presented by executives involved the ability for iPhone users with extra cash to invest in Apple stock, said a person.
But as markets were roiled by higher rates and soaring inflation, the Apple team feared backlash from users if they lost money in the stock market with the help of an Apple product, they said. the sources. That’s when the iPhone maker and Goldman changed direction and pushed ahead with plans to launch savings accounts, which enjoy higher rates.
The status of the stock trading project is unclear after Goldman CEO David Solomon bowed to internal and external pressure and decided to withdraw from almost all of the bank’s efforts in favor consumers. A source said the infrastructure for an investment feature is largely built and ready to go if Apple ultimately decides to move forward.
The Apple Card launched with great fanfare three years ago, but the company provoked regulatory pressure and racked up losses as its user base grew. Earlier this year, Goldman launched a high-interest savings account for Apple Card users, offering an annual percentage yield of 4.15%.
Goldman was also central to Apple’s BNPL offering. The product, called Apple Pay Later, can be used for purchases of $50 to $100 “on most websites and apps that accept Apple Pay,” according to the support page. Borrowers can split a purchase into four payments over six weeks without incurring interest or fees.
Before Goldman moved away from retail banking, the firm explored ways to expand its partnership with Apple, sources said. Most recently, Goldman was in talks to move both its card and savings account to American Express.
If plans for the trading app had moved forward, Apple would have entered a very competitive market, with companies like Robinhood, SoFi And The blocks Square, alongside traditional brokerage firms such as Charles Schwab And Morgan Stanley E-commerce.
Stock trading has become another way for financial companies to build customer loyalty and drive engagement on their platforms. Apple was pursuing the same approach, a source said. It’s a move that could draw interest from regulators, who have scrutinized Apple for its App Store practices. Robinhood has also been questioned by regulators for what they described as “gamifying” markets.
Other tech companies have launched into the space. Elon Musk’s X, formerly known as Twitter, is working on a way to let users buy stocks and cryptocurrencies through a partnership with eToro. PayPal had intended to launch stock trading after hiring a key industry executive in 2021. But the company scrapped those plans and said on an earnings conference call that it would cut spending and refocus on its core e-commerce business.
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