Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options

Apple is in talks with its investment bank Goldman Sachs about the possibility of offering customers financial loans when buying Apple products, according to a report by the Wall Street Journal on Wednesday.

The Wall Street firm is in talks to offer financing to shoppers buying phones, watches and other gadgets from Apple, people familiar with the matter said. Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates.

Talks between Apple and Goldman Sachs remain at an early stage and could still fall apart, according to WSJ. Both the tech giant and the investment bank declined to comment for the report.

Part of Goldman's discussions with Apple are said to involve taking over some form of Apple's iPhone upgrade program, which is designed for users who want to have the newest iPhone every year and comes with AppleCare+ included.

Those who sign up for the program in its current form can trade-in their existing iPhone for a new model after 12 monthly installments are made, starting a new cycle of the program each year. Apple started the program in September 2015 with the help of Citizens Financial Group, who finance the zero-interest loans for iPhone upgrades and higher-interest options for other device purchases. The program was introduced around the same time that wireless providers began reducing buyer subsidies for iPhones.

Goldman Sachs is said to view the potential financing deal with Apple as a way of growing its new consumer bank, as it looks beyond corporate clients to more fully embrace retail banking and consumer lending. Two years ago the investment firm launched Marcus, an online lender that helps people refinance credit-card debt, while the bank is also building a "point-of-sale" financing business that will offer loans to shoppers at checkout, according to people familiar with the firm who spoke to WSJ.