Apple ending Apple Card partnership with Goldman

Apple is set to sever ties with Goldman Sachs, signaling the end of their collaboration on the Apple Card and Apple Card Savings Account, as reported by various sources. The technology giant has proposed a 12-15 month exit plan to disentangle from the investment bank, according to The Wall Street Journal.

Launched in August 2019, the Apple Card aimed to enhance consumers' financial well-being with features like fee-free transactions, daily cash back, and seamless integration into Apple's mobile devices. In April 2023, the partnership expanded to include a savings account for Apple Card users, further aligning with Apple's commitment to building tools for healthier financial lives.

However, the collaboration took a downturn partly due to Apple's engineering concerns, according to Bloomberg. The Wall Street Journal revealed that Goldman Sachs executives had been exploring ways to exit the partnership, even approaching American Express to gauge interest.

While Goldman Sachs currently manages the Apple Card, the transition to a new issuer remains uncertain. Apple has not disclosed a replacement, and discussions with American Express raised concerns about program aspects, including loss rates.

Customers have no reason to worry about their accounts, as another financial institution will take over. Goldman Sachs' challenges in retail consumer lending, including the Apple partnership and the recent sale of Green Sky, have prompted the bank to reconsider its strategic focus.

Amid uncertainties, Synchrony Financial, which was initially a contender for the Apple Card program, is exploring the possibility of assuming control. For its part Apple aims to continue delivering top-notch tools and services for Apple Card users, according to company statements.

As Goldman Sachs pivots away from consumer finance, Apple's internal initiative, known as "Project Breakout," seeks to develop proprietary payment processing technology, reducing reliance on external partners like Goldman Sachs. The fate of the Apple Card and Savings Account remains uncertain, but industry observers predict a seamless transition to a new financial institution.