Apple, Inc. AAPL firmed up its foothold in the financial services arena with the launch of the Apple Card four years ago. The company had previously marked a foray into the sector with Apple Wallet and Apple Pay, launched in 2012 and 2014, respectively.
Apple Card, a credit card issued by Goldman Sachs Group, Inc. GS, debuted in the U.S. on Aug. 20, 2019, exclusively for U.S. consumers.
Linked to Apple Pay, it offers features like no fees, lower interest rates, and cash back on purchases. Integrated into the Wallet app and optimized for iPhone and iPad, users can set it as their default card for convenient in-store and online Apple product purchases via Apple Pay. While it functions like a traditional card, the titanium physical version covers non-Apple Pay transactions.
In April, Apple introduced a high-yield savings account tied to the Apple Card, amassing over $10 billion in deposits by August.
The Apple Card contributes to Apple’s Services business, a pivotal revenue generator. The Services segment achieved record revenue in the recent June quarter results, boosting profitability with its higher margins. However, Goldman Sachs’ “Platform Solutions,” including Apple Card, saw a net loss of $667 million in the same quarter, largely due to increased credit loss provisions and operational expenses.
Rumors of Goldman exiting the partnership due to its unattractive returns began doing the rounds earlier this year, although nothing has been confirmed officially yet.
See Also: Everything You Need To Know About Apple Stock
Apple’s push deeper into the financial services industry is apparently due to its desire to capitalize on the rapidly evolving banking industry, which is bolstered by the integration of technology for improving user experience.
Hypothetical Returns From Investing In Apple: If an investor had put in $1,000 in Apple on Aug. 20, 2019, when the Apple Card was launched, he would have 19.6 shares. The stock ended the day at a split-adjusted price of $51.15.
The same 19.6 shares would be worth $3,465 (based on Tuesday's closing price of $177.23). The investment would have fetched a return of roughly 247% over a four-year period.
In comparison, the broader S&P 500 Index generated a return of 51.3% and the Invesco QQQ Trust QQQ, which tracks the Nasdaq 100 Index, added 99.3%.
Apple ended Tuesday's session at $177.23, up 0.79%, according to Benzinga Pro data. The stock is up about 37% year-to-date.
Read Next: Apple Card, Next Stop: India! iPhone-Maker Discusses Plans With RBI, HDFC Bank
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