Goldman Sachs may be looking to exit from its partnership with Apple card. The Apple Card may soon no longer be backed by Goldman Sachs. American Express in talks to take over Goldman’s card deal. According to a report from The Wall Street Journal, Goldman Sachs is in talks to partnership termination with Apple and joining hands with American Express.
Apple and Goldman Sachs partnership
Apple launched its credit card in partnership with Goldman Sachs in 2019 along with more products since then. It more recently, made its new Pay Later service available to users in March. While Apple’s new financial division is handling the lending side of its buy now, pay later service, it’s still working with Mastercard and Goldman Sachs to enable the program.
The investment banking giant has made forays into consumer lending in recent years, but some of those have been abandoned. Now Goldman is considering a potential withdrawal from Apple card too, according to a report by The Wall Street Journal.
However, Goldman’s broader consumer efforts have struggled, leading to criticism of CEO, David Solomon over his support of attempts to diversify away from its traditional activities. Last October, Solomon said that the partnership with Apple had been extended until 2029, but it seems the plans have changed and Goldman Sachs is considering ending its partnership with Apple.
Apple and Goldman Sachs potential separation
It seems as per report, Goldman has discussed a deal that would lead to its exiting from Apple card and moving to American Express.
CNBC later confirmed the discussions, but both CNBC and the Journal said no deal was imminent. Any change would also require Apple’s approval.
In January Goldman said it’d lost about $3 billion from its consumer banking activities in three years. The following month Solomon said the bank was considering “strategic alternatives,” but had appeared committed to the Apple partnership.
Goldman may also be looking to get out of offering a General Motors-branded credit card, the Journal reported. As per the sources, Goldman Sachs wants to exit from both of these partnerships and have American Express take its place. Goldman has abandoned other elements of its consumer banking push in recent months.
It seems Goldman Sachs might prefer Wall Street to Main Street.
According to the Journal, a deal with American Express isn’t “imminent or assured.” It also wouldn’t happen anytime soon, given that Apple would have to agree to the new partnership. Apple is reportedly aware of these discussions has not responded yet.
The shift to American Express could affect where Apple cardholders can use their card. While Apple Cards are currently issued by Mastercard, which is accepted at a majority of retailers across the US, American Express has a bit less reach, although this seems to have improved in recent years.
However, it wouldn’t be surprising if such an arrangement comes to pass. Earlier this year, Goldman Sachs CEO, David Solomon said he was “considering strategic alternatives” for the investment firm’s consumer arm. Beyond its deal with Apple, Goldman’s consumer facing business includes a credit card partnership with General Motors as well as GreenSky, the lending company Goldman bought for $2.2 billion in 2021.
There has been no immediate respond from either Apple or Goldman.
