Apple and Goldman Sachs to part ways on Apple Card, no successor named
Goldman Sachs is expected to stop issuing the Apple Card in early 2025, as the companies seek other financial institutions to back the card and savings account.
Apple Card
Apple's consumer-focused credit card, called the Apple Card, has been seen as a success for Apple, but not for Goldman Sachs. After months of reports about a disgruntled Goldman Sachs, it seems the companies are ready to part ways.
According to a report from The Wall Street Journal, Apple sent a proposal to Goldman Sachs to exit their contract in 12 to 15 months. The exit would cover their entire partnership, including Apple Card and Apple Savings.
There isn't any information about a possible new partner beyond speculation. Goldman Sachs has allegedly held discussions with American Express to take over Apple Card, and Synchrony Financial has also apparently cited interest in taking over.
The report says the partnership has had issues from the start. Apple ran ads saying that Apple Card wasn't from a bank, the company insisted on customers getting their bill at the start of each month, and regulatory scrutiny occurred as a result of the partnership.
It's still early days as the proposal hasn't even been approved. Apple Card and Apple Savings customers should carry on as usual until Apple makes an official announcement.
There isn't any word on how this might affect Apple Card holders, rates, fees, or other operations surrounding the credit card. Apple will likely fight to retain the same level of control it exerted with Goldman Sachs, which seems to have led to this situation in the first place.
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Comments
Does it make sense for Apple to take over the whole shebang? Apple already get most of the profit from the card use and it may be hard to get another CC company to honor the same deal. This would widen their services portfolio and allow them to control the experience completely.
Synchrony does sound like a good idea. Their website and service is very poor.
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Mastercard and Visa aren't credit cards: they are payment networks. American Express is both a credit card company and a payment network.
Technically, the Apple Card is a Mastercard issued by Goldman Sachs USA, NA. It says so in the fine print of the service agreement that any Apple Cardholder accepted (by clicking "Accept"). In that way, it's similar to a VentureOne Mastercard issued by CapitalOne.
Barclays Bank would be the issuing bank. It's almost certain that Apple had discussions with Barclays Bank about the Apple Card (before it debuted) before Apple selected Goldman Sachs as a partner.
Apple would have to partner with banks from other countries to service customers in those areas. But those banks have to have a business in the country and follow the banking regulations of that country as well. It's not like an random American can apply for a JCB card (a Japanese card) or a UK card.
To have American cardholders, Apple needs to find a bank located in the USA (which would be subject to US consumer banking laws, not those of the UK, Japan, Nigeria, wherever.
Consumer banking is one of the most heavily regulated industries. Apple has zero interest becoming a bank. If this weren't the case, Apple would have started a bank a long time ago (before they partnered with Barclay Bank for the Apple Card predecessor), decades ago.
This is also why many companies have divested their consumer loan divisions. And with each passing year, there are more banking regulations, not less.
Apple doesn't want consumer debt as a liability.
And as it turns out, neither does Goldman Sachs.
I don’t see AMEX taking this on, not enough $$$$ in it for them, unless they add significant fees into the equation. AMEX won’t make the Apple Card experience better than it is, just more expensive, for customers as well as vendors that one day are able to accept the AC and then after the transition to AMEX would not be able to because of AMEX and their approach, something that won’t change just because it’s the Apple Card. There’s a reason that more businesses accept VISA and MASTERCARD than AMEX.