Apple to End Credit Card Partnership with Goldman Sachs | Coinspeaker

Apple to End Credit Card Partnership with Goldman Sachs

| Updated
by Babafemi Adebajo · 3 min read
Apple to End Credit Card Partnership with Goldman Sachs
Photo: Depositphotos

While the proposal to end the partnership may have come from Apple, the tech company will benefit the least.

Apple Inc (NASDAQ: AAPL) is set to end its partnership with Goldman Sachs Group Inc (NYSE: GS) according to information provided by the Wall Street Journal. The report suggests that Apple has tabled a proposal to terminate its credit card and savings account partnership within the next 12 to 15 months.

Both companies saw their stock lose value after the announcement. After hours, GS was down 0.27%, while AAPL was also in the red zone. Now, in the pre-market, AAPL stock is trading at $190.68, which indicates an increase of 0.15%, Goldman Sachs shares are at $338.50, which means that they are 0.25% up.

The partnership between Apple and Goldman Sachs is one of the highest-profile partnerships between a tech company and a bank. According to Reuters, the duo began their collaboration in 2019 with the credit card. Since then, they have also teamed up for the high-yield Apple Savings account and the Apple Pay Later feature.

Trouble in Paradise

While the services have been hugely successful, both companies have had their fair share of issues since the collaboration began.

Reports suggest several Goldman partners believe the consumer-lending business has been more trouble than it is worth. In fact, Goldman’s Platforms Solutions, a collection of businesses that includes Apple Card, reportedly lost $1.2 billion in just nine months. Likewise, several Goldman executives believe the relationship with Apple is what increased the regulatory scrutiny on the bank for its ‘credit card account management practices’.

On its part, Apple is displeased with the tainted customer service reputation of its ‌Apple Card‌ and Apple Savings plan – all involving services handled by the bank.

Despite the signs of a potential fallout, the announcement is a 180-degree spin from a year ago when Goldman Sachs chose to extend its partnership with the iPhone producer.

Will Apple Be the Biggest Gainer or Loser?

While the proposal to end the partnership may have come from Apple, the tech company will benefit the least.

Among other things, Apple now needs to find a new financial partner for its services. Thankfully, American Express and Synchrony Financial have shown interest in taking over. However, the deal may not come as easily. Already, Amex has shared concerns about the loan loss rates and the deal between Apple and Goldman Sachs that requires the ‌Apple Card‌ to run on the Mastercard network until 2026.

Again, these new financial partners are likely to pursue a better deal that will earn them more revenue than Goldman got because of its willingness to diversify into consumer products. 

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