Goldman Sachs is reportedly seeking to end its partnership with tech giant Apple, as revealed in a new report by The Wall Street Journal. The banking company, which collaborated with Apple for the Apple Card credit card, Apple Pay Later, and the Apple Savings account, is looking to reduce its focus on consumer business. Talks are now underway between Goldman Sachs and American Express (Amex) regarding a potential takeover, which would involve transferring credit card partnerships, including the Apple Card, to another company. The discussions are still in progress, and no agreement has been reached between Goldman Sachs and Amex.
The decision to sever ties with Apple comes as Goldman Sachs faces financial challenges related to the Apple Card. Recent reports suggest that the banking giant may be losing money faster than anticipated on the partnership. The potential move to exit the Apple Card deal would effectively mark the end of Goldman Sachs' ambitions in the consumer lending business. The company has already taken measures to withdraw from this sector, including ceasing personal lending and attempting to sell GreenSky, a home improvement financier it acquired in 2022.
Although Goldman Sachs has publicly expressed its commitment to the Apple Card, it has acknowledged the financial losses incurred. In 2022, the bank's consumer credit division reported a loss of $1.2 billion over nine months, primarily attributed to the Apple Card.Goldman Sachs CEO David Solomon admitted to some missteps in the consumer lending arena, stating that the company had taken on too much, too quickly. Despite the challenges, Goldman Sachs remains optimistic about its other consumer services and the potential benefits of its partnership with Apple. The bank had invested heavily in launching the Apple Card, reportedly spending around $350 per new customer. It had also scaled back efforts to transform its consumer savings business, Marcus, into a comprehensive digital bank.
Although the process of disentangling the partnership would require Apple's agreement, the ongoing discussions between Goldman Sachs and Amex indicate the seriousness of the banking company's desire to move on from the Apple Card deal.