Dive Brief:
- Apple sent a proposal to Goldman Sachs to end its credit-card partnership with the investment bank within the next 12 to 15 months, The Wall Street Journal reported Tuesday, citing sources familiar with the matter.
- The proposed winddown would entail the entire consumer partnership, including the savings account that was rolled out this year, the sources said.
- The reported exit comes as Goldman continues to walk back an ambitious retail strategy amid mounting losses and growing skepticism over the performance of the firm’s consumer-focused operations.
Dive Insight:
The proposed winddown of Apple and Goldman’s credit-card relationship could take multiple years, a source with knowledge of the matter told Bloomberg.
The credit-card deal, which launched in 2019, was extended last year and had been slated to last until 2029.
“It’s a very, very strong partnership where there’s a lot of opportunity,” Goldman CEO David Solomon said on a call with analysts last year.
The two firms launched a 4.15% high-yield savings account in April, and their Apple Pay Later, a buy now, pay later service, rolled out in March.
But the partnership could be the latest casualty of Goldman’s retreat from the mass market.
The firm sold installment lending fintech GreenSky to a consortium of investors led by private-equity firm Sixth Street in October. Goldman had hoped the fintech, which it acquired in 2022, would help it hit ambitious targets for its retail platform Marcus.
Reports surfaced in June that Goldman was looking to offload its Apple credit card and high-yield savings account products to American Express, according to The Wall Street Journal and CNBC.
With or without a Goldman partnership, however, Apple remains committed to its Apple Card credit card and savings account and doesn’t plan to discontinue the products, a source told Bloomberg.
The tech giant has not yet started discussions with firms that could potentially replace Goldman, the source said.
Synchrony Financial, which had competed against Goldman to land the Apple account, is exploring the possibility of taking over the tech giant’s credit-card program, sources told The Journal.
Goldman is also expected to offload its General Motors card partnership.
In a statement to Bloomberg, Apple said it was “focused on providing an incredible experience for our customers to help them lead healthier financial lives.”
“The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them,” the company said.
Goldman, for its part, told employees who work on its credit-card partnerships that they would be eligible for pay equal to one year of their compensation if their jobs are eliminated, The Wall Street Journal reported.
Some at Goldman have faulted Apple over an investigation the Consumer Financial Protection Bureau launched, into the bank’s credit card account management practices, including how it resolves billing errors and processes refunds. Goldman disclosed the probe in August 2022.
