Apple's (AAPL) - Get Report officially launched its new joint credit card with Goldman Sachs (GS) - Get Report on Tuesday, the first of several expectednew service offerings from the tech giant this year.
All U.S. customers will have immediate access to the card Tuesday by applying for the card through the Wallet App on the iPhone, according to Apple's press release. iPhone users will be able to begin using the card with Apple Pay even before receiving a physical credit card in the mail.
Apple is offering 2% daily cash back on purchases that use Apple Pay, 1% cash back for other purchases and 3% cash back for purchases of Apple products and services. Apple is also offering 3% cash back when they use the card to pay for Uber (UBER) - Get Report rides and Uber Eats purchases.
The card, which was first announced in March, carries no fee and has an app that allows users to easily categorize purchases and organize personal finances. The app and card are both centered on privacy and protection of user information.
The Apple Card is part of Apple's burgeoning and higher-margin Services business, which Morgan Stanley analysts forecast will grow from 18% of the company's total revenue and 30% of its total gross profit in 2019, to 27% and 44%, respectively, by 2023. Apple hopes to reach $50 billion in annual Services revenues by 2020.
While Apple Card adoption is not expected to ramp up significantly in 2019, Morgan Stanley analyst Katy Huberty wrote in a recent note that she expects "easing App Store comps in China as well as new Services, starting with Apple Card launching in August, to contribute incremental Services revenue in calendar year second half 2019."
Apple will also likely launch its Apple TV Plus subscription offering in November.
Apple shares were edging 0.52% higher to $211.44 on Tuesday late morning, while the broader U.S. market fell slightly. Apple shares are up about 34% this year.
Save 57% With Our Labor Day Sale. Join Jim Cramer's Action Alerts PLUS investment club to become a smarter investor! Click here to sign up!