Apple may end partnership with Goldman Sachs, leaving Apple Card's future uncertain

Apple has partnered with global financial group Goldman Sachs to develop Apple Card , a credit card for Apple Pay, and a high-yield savings account service for Apple Card users . However, following rumors that Goldman Sachs should withdraw from the company due to deteriorating performance in high-yield deposits, the Wall Street Journal reported that ``Apple 'We have decided to end our partnership with Goldman Sachs.'

Apple Pulls Plug on Goldman Credit-Card Partnership - WSJ
https://www.wsj.com/finance/banking/apple-pulls-plug-on-goldman-credit-card-partnership-ca1dfb45

Apple to end credit card partnership with Goldman Sachs - WSJ | Reuters
https://www.reuters.com/technology/apple-end-credit-card-partnership-with-goldman-sachs-wsj-2023-11-28/

Apple ending Apple Card partnership with Goldman Sachs - 9to5Mac
https://9to5mac.com/2023/11/28/apple-ending-relationship-with-goldman-sachs-fate-of-apple-card-unclear/

Apple reportedly pulling plug on Goldman credit card partnership
https://nypost.com/2023/11/28/business/apple-reportedly-pulling-plug-on-goldman-credit-card-partnership/

Apple has sent a proposal to Goldman Sachs to end the partnership within the next 12 to 15 months, according to a person familiar with Apple Card's high-yield deposit service. The partnership between the two companies has covered Apple Card, a credit card service launched by Apple and Goldman Sachs in 2019, and a high-yield deposit service launched in April 2023.

Apple starts offering savings account service with a yield of 4.15% - GIGAZINE

It's unclear whether Apple is looking for new partners for its own credit card service, Apple Card, or plans to end Apple Card itself. In addition, since the partnership between Apple and Goldman Sachs was just extended in 2022 to 2029, the Wall Street Journal points out that ``you can see that there was a sudden change in policy.''

Apple announced in April 2023 a high-yield deposit service for Apple Card users, and it got off to a good start, collecting over 130 billion yen in deposits in the four days after the service launched. However, there have been numerous complaints from users, such as `` It took several weeks to send money, '' and it has been reported that there are calls from within Goldman Sachs to withdraw from the high-yield deposit service. Ta.

``Apple's high-yield deposits were a mistake,'' says Goldman Sachs, a trading partner, and it is also reported that it is considering withdrawing from the consumer finance business - GIGAZINE

In addition, Goldman Sachs was considering dissolving its partnership with Apple as early as early 2023, and it seems that it actually communicated this to Apple. Goldman Sachs has reportedly discussed transferring the Apple Card business, which it has built in partnership with Apple, to American Express, a major credit card company. American Express has reportedly expressed concerns about some aspects of the Apple Card program, but it is unclear whether these discussions are continuing at the time of writing.

According to some people involved, American financial services company Synchrony Financial is also considering taking over the Apple Card business. Synchrony Financial is America's largest issuer of store credit cards, lending to a wide range of consumers, including those with low credit scores. In addition, Synchrony Financial has had close relationships with high-tech companies for many years, and partner companies include Amazon and PayPal.

The Wall Street Journal points out that Apple is increasingly relying on its services business as iPhone sales are sluggish. Looking at the numbers for the third quarter of 2023 (July to September), Apple's overall sales are down 1% compared to the same period last year, but sales of the service business are up 16% compared to the same period last year. Of these, the revenue from Apple Card-related business appears to be only a small portion of the revenue from the service business.

For Goldman Sachs, the end of its partnership with Apple marks the failure of Goldman Sachs' plans to diversify its business beyond serving large corporations, investors and the ultra-high net worth. It means that.