Apple’s sleek white-and-silver titanium credit card and high-yield savings account may soon need a new financial partner.
The tech giant has sent its current partner Goldman Sachs a proposal to end their partnership within the next 12 to 15 months, marking an end to the bank’s rocky experience in consumer lending.
When Apple first launched the Apple Card in 2019 it caught the attention of Goldman Sachs CEO David Solomon, who saw an opportunity to add value and additional features to the iPhone while amplifying Apple’s fast-growing services business with fees –– eventually leading to one of the highest-profile partnerships between the tech and banking worlds.
But despite the Apple Card becoming a major product for Goldman Sachs, the bank’s foray into consumer banking, opposed to its typical focus on aiding the uber-rich, has invited unwanted attention from regulators, cumbersome customer service demands -- and most notably, has cost the company billions.
Earlier this year, Goldman Sachs reported that its consumer lending business had lost around $3 billion since 2020. The loss rose to $4 billion by Q2 2023.
Because of the benefits the partnership has provided Apple, it is surprising that the tech company is offering Goldman Sachs an opportunity to leave, especially after renewing the Apple Card agreement until 2029.
“This could mean that Apple has already found another bank that the company believes is better suited for the Apple Card and Savings account long-term,” notes Fast Company.
According to initial reporting by The Wall Street Journal, Synchrony Financial -- which runs card programs for Amazon and PayPal -- is a likely possibility. This would mean that unlike Goldman Sachs, Apple would be partnering with a bank that specializes in consumer credit services and co-branded cards.