Apple is pulling out of its Apple Card partnership with Goldman Sachs, according to a report by The Wall Street Journal. Apple is planning to stop working with Goldman Sachs sometime in the next 12 to 15 months. At this point, we don’t know whether or not Apple has a new partner for the Apple Card waiting in the wings. The duo have partnered on the Apple Card since it launched in 2019, and have also teamed up for the high-yield Apple Savings account and the Apple Pay Later feature.
Apple and Goldman Sachs will dissolve their partnership for both the Apple Card and the Apple Savings account. Apple provided a statement to CNBC said that it will continue to provide “the best tools and services” for Apple Card customers.
“Apple and Goldman Sachs are 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.”
A June 2023 rumor indicated Goldman Sachs was looking for a way out of the relationship. Goldman Sachs has acted as the financing partner for the Apple Card credit card in the United States, Apple Pay Later, and the Apple Savings account that Apple Card users can open.
The financial firm was said at the time to be in discussions with American Express about AMEX to take over its Apple-related operations. However, the Apple Card needs to run on the Mastercard network until 2026 due to a deal established between Apple and Goldman Sachs. Amex also reportedly had concerns about aspects of the program such as loan loss rates due to Apple’s push to have customers approved, so the status of the talks is not known.
Synchrony Financial, known as the largest issuer of store credit cards, has also considered taking over the Apple Card, according to The Wall Street Journal.
The Apple and Goldman Sachs partnership has been anything but copacetic. Goldman Sachs ran into customer service issues, as customers were subject to long wait times for disputed Apple Card transactions and issues with the Apple Savings account.
The U.S. Consumer Financial Protection Bureau in January launched an investigation into Goldman Sachs due to customer complaints. Apple is not pleased with the customer service reputation of its Apple Card and Apple Savings products, while some Goldman Sachs executives blame Apple for the investigation.
The Apple Card partnership between the two has not been a traditional one. Goldman Sach had not previously been involved with consumer banking, and its deal with Apple does not allow it to collect the fees that many credit card issuers benefit from. The bank does not get a cut of the fee that merchants pay to Apple to accept the Apple Card, nor is it able to collect annual fees, late fees, or foreign transaction fees. The financial firm does earn fees from loans issued to cardholders who split Apple purchases into installments.