Apple and Goldman had planned stock trading features for iPhones until markets turned last year

KEY POINTS

• Apple is considering introducing a feature on the iPhone Marketplace that would allow users to buy and sell stocks, according to three sources close to the project.

• The offering would be in collaboration with Goldman Sachs, which has already worked with Apple on other financial products.

• The iPhone maker concluded the time was not right in a slowing market and the company put the project on hold, according to sources.

As stock prices soared in 2020 and masses of consumers flocked to trading apps like Robinhood, 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 Persons.

The project was abandoned last year due to the market turnaround, said the sources, who did not want to be identified as they were not authorized to speak on the matter.

This previously unreported measure would expand Apple’s Goldman-based financial product range. Apple first partnered with Wall Street Bank in 2019 to offer a credit card, then added BNPL (buy now, pay later) loans and a high-interest savings account. In the previous month, the firm proudly revealed that user deposits in its savings account options had exceeded a remarkable $10 billion.

Apple and Goldman representatives declined to comment.

Amidst the era of zero interest rates brought on by the COVID-19 pandemic, Apple diligently developed a trading feature that allowed individuals confined to their homes to efficiently trade stocks, including popular meme stocks such as GameStop and AMC, all from the convenience of their smartphones, thereby enabling substantial time and cost savings.

Apple

Two sources say talks between Apple and Goldman began during this hype cycle in 2020. Work has been progressing, with Apple’s investment feature expected to launch in 2022. One hypothetical use case that executives suggested was that iPhone users with extra cash could invest money in Apple stock. said one of the people.

But with markets plagued by higher interest rates and skyrocketing inflation, Apple’s team fears a backlash from users if they lose money in the stock market thanks to an Apple product, sources say. That’s when the iPhone maker and Goldman changed course and began a plan to introduce savings accounts that would benefit from higher interest rates.

The status of the stock trading project is unclear after Goldman CEO David Solomon caved to internal and external pressure and decided to withdraw from almost all of the bank’s consumer-friendly efforts. A source said the infrastructure for the investment function is mostly built and ready to go if Apple ultimately decides to move forward.

The Apple Card was launched with great fanfare three years ago, but the company created regulatory confusion and suffered losses as its user base grew. Earlier this year, Goldman introduced a high-yield savings account for Apple Card users that offers a 4.15% annual return.

Goldman also played a key role in Apple’s BNPL offering. The product, called Apple Pay Later, can be used for purchases between $50 and $100 “on most websites and apps that accept Apple Pay,” according to its support page. Borrowers can split their purchase into four installments over six weeks without incurring interest or fees.

Before Goldman departed from retail banking, the company was exploring options to expand its partnership with Apple, the sources said. Recently, Goldman was in discussions about switching its card and savings account to American Express.

If plans for a trading app become reality, Apple would enter a highly competitive market that includes companies like Robinhood, SoFi, and Block’s Square, as well as traditional brokerage firms like Charles Schwab and E-Trade Morgan Stanley.

Within the dynamic realm of financial services, stock trading has surfaced as a key instrument for financial institutions to retain their customer base and stimulate active engagement on their platforms. According to an insider, Apple was allegedly following a similar strategy. This strategic maneuver might attract the attention of regulatory bodies, which have closely examined Apple’s conduct in relation to its App Store policies. Regulatory authorities have closely examined Robinhood, expressing worries about their perceived ‘gamification’ of the financial markets.

Several other technology firms have been venturing into this domain. Elon Musk’s X, formerly known as Twitter, is working on a way to allow users to buy stocks and cryptocurrencies through a partnership with eToro. PayPal had planned to start trading stocks in 2021 after hiring a key industry executive. Nevertheless, the company changed its course, announcing in an earnings call that it had decided to trim expenses and redirect its attention to its primary focus, which is e-commerce.

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