Apple is looking to end its partnership with Goldman Sachs
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A recent report by the Wall Street Journal says that Apple has sent a proposal to its financial partner, a leading bank, Goldman Sachs. According to the proposal, the tech giant seeks to end the credit card and savings account partnership, which effectively means the breakup between the two firms.
According to the term sheet that Apple had delivered, the breakup is to be expected within the following 12 to 15 months, as the WSJ reports. However, a different report by Bloomberg said that the procedure could end up spanning multiple years.
Apple and Goldman to end collaboration after four years
Apple and Goldman initially partnered for the credit card scheme back in 2019, which was also when the card went live. Goldman recently extended that partnership until 2029. In addition to the card deal, Goldman is also Apple’s banking partner on the high-yield savings account feature.
However, the bank recently started to retreat from the consumer market, with reports saying that it is hiving off digital bank Marcus, and putting the Apple business into a new Platform Solutions unit. This arrangement was also used for the firm’s transaction banking operations, as well as the buy now, pay later outfit, Greensky.
Greensky has been sold since the deal with Goldman was made, but now, the bank is also reportedly interested in selling off its credit card program with General Motors. As for Apple, the WSJ reported that Goldman is considering passing on the arrangement to American Express.
The split with Gldman could affect Apple’s revenue
Commenting on its decision to withdraw from the consumer market, Goldman’s Chairman and CEO, David Solomon, said in the January call with analysts that it became clear to the bank as far back as in early 2022 that Goldman is doing too much. According to him, the bank has spread its services too thin, and it started affecting its execution.
Speculators have pointed out that the end of the partnership could be an obstacle for Apple’s goals of increasing service revenue, even though the iPhone maker was the one who finally made the move to end the partnership. Apple’s product sales have been going down over the last few years — by around 1% in 2022, even though its revenue went up by 16% during this same period.
However, while Apple is splitting from Goldman Sachs, it appears that the company does not plan to end its card deal, it will simply replace Goldman with a new partner. For the moment, the company did not hint at who that partner might be, although it has plenty of suitors to choose from.
