Apple-Goldman Sachs End 'Apple Card' Partnership... Seeking New Partners

"To End Within 12-15 Months... Including Deposit Accounts"
Amex and Synchrony Mentioned as New Partners

Apple has reportedly informed Goldman Sachs, its partner in the Apple Card credit card business for over four years, of its intention to end the partnership next year, drawing attention to the background of this decision. While Apple is aggressively pursuing retail financial services, Goldman Sachs appears to be preparing to withdraw from retail finance, indicating a divergence in their interests.

There is speculation that Apple may seek a new partner or move to acquire small financial firms as subsidiaries on its own, which is expected to have a significant impact on the related financial industry in the future.

[Image source=Reuters Yonhap News]

On the 28th (local time), The Wall Street Journal (WSJ), citing multiple sources, reported that Apple has proposed to Goldman Sachs, the partner of the credit card "Apple Card" launched in 2019, to terminate their partnership within the next 12 to 15 months. The termination includes the Apple Card and the deposit accounts launched this year.

Originally, the partnership was scheduled to last until 2029, but the possibility of ending the partnership between Apple and Goldman Sachs had already emerged earlier this year. Notably, in June, WSJ reported that Goldman Sachs regretted the partnership due to a sharp increase in losses in the consumer finance sector caused by the collaboration with Apple, attracting attention.

WSJ also stated that the partnership between the two companies was not smooth from the start. Apple reportedly upset Goldman Sachs by promoting the Apple Card without clearly stating that the card was issued by a bank. Additionally, Apple issued most cards without checking applicants' credit status, increasing Goldman Sachs' loan losses.

Moreover, Goldman Sachs had to undergo regulatory investigations related to credit card account management practices, such as handling Apple Card refunds and billing errors. With Apple aggressively marketing retail financial products, including launching Apple Savings with an annual interest rate of 4.15% in April, Goldman Sachs apparently decided it was no longer easy to continue the partnership and ultimately ended the collaboration.

On the other hand, Apple is reportedly planning to continue the Apple Card business by finding a new partner even after ending the partnership with Goldman Sachs. Since 2019, Apple has been diversifying its revenue structure, which was focused on manufacturing iPhones, iPads, MacBooks, etc., and accelerating its financial business to strengthen its services sector.

An Apple representative told CNBC, "The Apple Card has received great response from consumers. We will continue to provide the best tools and services for consumers," indicating that the related business will continue. Potential new partners for Apple include American Express and Synchrony Financial.

Apple's notification of ending the partnership is expected to accelerate Goldman Sachs' withdrawal from the consumer finance business. Earlier this year, Goldman Sachs announced it would "consider strategic alternatives" regarding its consumer finance business and ended negotiations with T-Mobile for a credit card launch in February. It is also considering transferring its credit card partnership with General Motors (GM) to Amex or other card companies.

This content was produced with the assistance of AI translation services.