Tech giant Apple and financial institution Goldman Sachs are reportedly set to end their credit-card partnership, which was extended through 2029 just over a year ago. According to The Wall Street Journal, Apple has sent a proposal to Goldman Sachs to exit from the contract within the next 12 to 15 months.
The proposed exit includes discontinuing the high-yield savings account that the two companies launched earlier this year, as well as the credit card that was rolled out in 2019. While it is uncertain whether Apple has found a new issuer for the card, it shouldn’t have much trouble in this regard.
This unexpected parting of ways is not an ideal outcome for Apple, as the company is actively expanding into financial services to enhance its services business. However, it may be for the best that both parties go their separate ways.
Goldman Sachs is seeking to quickly undo its consumer banking experiment, as the bank wants to put an end to its messy foray into the consumer lending space. The reversal of Goldman’s consumer lending push has been rapid, with the bank reporting a loss of $3 billion on consumer banking since 2020. It informed Apple at the beginning of 2023 about its desire to terminate the partnership.
This move comes after Goldman’s sale of its lending platform GreenSky at a substantial loss in October, as well as ending its credit card partnership with General Motors earlier this month. Additionally, the bank sold its personal financial management unit in August. The third-quarter profit of Goldman Sachs declined by 33% due to its swift retreat from consumer banking.
Apple and Goldman Sachs have yet to respond to requests for comment. In early Wednesday trading, Goldman stock edged 0.3% higher, while Apple remained unchanged.
