The partnership between Goldman Sachs and Apple for the Apple Card may be ending sooner than anticipated. Goldman Sachs CEO David Solomon hinted at this possibility during a recent earnings call, suggesting the deal might not last until its 2030 expiration date. This echoes a November 2023 Wall Street Journal report indicating a potential end within 12 to 15 months, driven by Goldman Sachs’ desire to exit the consumer business.
While the contract officially extends to 2030, Solomon acknowledged a chance of early termination. Launched in 2019, the Apple Card boasts over 12 million users. However, the partnership has faced challenges for Goldman Sachs, including regulatory scrutiny, customer service issues related to billing practices, and a substantial $1 billion net loss reported last January. Apple’s insistence on a monthly billing cycle, rather than the rolling basis common among credit card companies, contributed to these difficulties.
These issues have prompted Goldman Sachs to explore alternatives, including discussions with American Express and JPMorgan Chase about assuming the Apple Card partnership. Concurrently, Apple has engaged in similar conversations with Synchrony Financial, Capital One, and Chase. The 15-month timeframe mentioned in the Wall Street Journal report points to a potential conclusion around February. The future of the Apple Card partnership remains uncertain, with potential shifts in the financial landscape on the horizon.
The challenges encountered with the Apple Card have led Goldman Sachs to seek an exit strategy. Their discussions with potential successors like American Express and JPMorgan Chase highlight the bank’s intent to move away from this consumer venture. Meanwhile, Apple’s parallel discussions with Synchrony Financial, Capital One, and Chase underscore the active search for a new partner. The February deadline, as suggested by the earlier reports, marks a critical juncture for the future of the Apple Card. Further developments will clarify the direction of this significant financial partnership.
Ultimately, the fate of the Goldman Sachs and Apple partnership hangs in the balance. While the 2030 contract remains in place, the mounting challenges and active pursuit of alternative partners by both companies suggest an earlier termination is plausible. The next few months will be crucial in determining the ultimate outcome and the future landscape of the Apple Card.
Reuters
Wall Street Journal report
talking to American Express and JPMorgan Chase about taking over the Apple Card
