In the midst of a soaring equities market and the rise of trading apps like Robinhood, Apple and Goldman Sachs had plans to introduce a stock trading feature for consumers. According to unnamed sources, the project was put on hold in the wake of market downturns. This little-known endeavor would have expanded Apple’s suite of financial products, which already included a credit card, buy now, pay later loans, and a high-yield savings account. Although representatives for Apple and Goldman declined to comment, it is clear that the initiative was a response to the surge in retail trading activity during the pandemic.
The Apple investing feature was intended to allow iPhone users to invest their extra cash directly into Apple shares. With the hype surrounding meme stocks like GameStop and AMC, many individuals turned to trading shares from the convenience of their smartphones. Against the backdrop of zero interest rates and consumers stuck at home, Apple saw an opportunity to leverage its customer base and capitalize on the trend. However, as inflation rates rose and markets were beset by volatility, concerns arose about the potential for users to lose money in the stock market with the help of an Apple product.
Wary of user backlash, Apple and Goldman decided to shift their focus towards launching high-yield savings accounts instead. These accounts benefit from higher interest rates and were seen as a safer alternative for Apple’s customer base. While the status of the stock-trading project remains uncertain, sources indicate that the infrastructure for such a feature is largely in place, should Apple choose to revive the initiative.
If Apple had entered the stock trading market, it would have faced stiff competition from established players like Robinhood, SoFi, Block’s Square, Charles Schwab, and Morgan Stanley’s E-Trade. These platforms have successfully attracted and retained customers by offering accessible and user-friendly trading experiences. Stock trading has become a valuable tool for financial firms to engage with customers and foster loyalty. Apple aimed to adopt a similar strategy, but the move would likely have drawn regulatory scrutiny, given the company’s previous scrutiny for its App Store practices. Regulators have also scrutinized Robinhood for “gamifying” markets, further highlighting the challenges of entering this space.
Apple’s failed foray into stock trading is not unique among tech companies. Elon Musk’s X, formerly known as Twitter, is exploring a partnership with eToro to allow users to buy stocks and cryptocurrencies. Additionally, PayPal briefly entertained the idea of launching stock trading following the hiring of a key industry executive, but ultimately refocused on its core e-commerce business. These examples underscore the growing interest of tech companies in the financial services sector.
It remains to be seen whether Apple will reconsider its stock-trading plans or if the focus will remain on its existing financial products. While the collaboration between Apple and Goldman Sachs has yielded successful ventures like the Apple Card and high-interest savings accounts, the stock-trading feature presents a unique set of challenges. As the financial landscape continues to evolve, it will be interesting to observe how tech companies navigate the intersection of finance and technology.
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