Apple dropped Goldman Sachs as its fintech partner, according to The Wall Street Journal. Are we surprised? Not in the least.
Before we dive into the telltale signs of their splintering relationship, let’s discuss what we know so far. Citing “people briefed on the matter,” WSJ claims that Apple wants to dissolve its alliance with the Wall Street bank in 12-to-15 months.
This disbandment spans across the duo’s “entire consumer partnership,” WSJ said, including the Apple Card and the Apple Savings Account.
Again, we’re far from shocked. We always knew there was trouble in paradise.
3 signs that Apple’s relationship with Goldman Sachs was fractured
After launching the Apple Savings Account in April, Apple lured users into its Apple Card lair after dangling an attractive 4.15% interest rate carrot. Before you can set up an account, you must get approved for an Apple Card first.
As someone who has an Apple Card and an Apple Savings Account, dealing with Goldman Sachs has been a headache. And rightly so, Apple may be cautious about continuing its dealings with Goldman Sachs.
1. Reports of Goldman Sachs’ shaky customer service
In early June, WSJ reported that some customers had difficulties getting money out of their Apple Savings Account. They claimed that the money seemed to disappear for several weeks after transferring it out.
Fortunately, all of the victims in WSJ‘s report ended up getting their money back, but only after an abnormally long delay.
According to The Information, Apple’s role in the partnership involves designing the iPhone wallet app UI, creating a sleek, titanium card, and other slick features. Goldman, on the other hand, mainly handles customer service, underwriting, transactions, and other bank-like tasks, but apparently, some customers aren’t thrilled with Goldman’s performance.
It’s worth noting that plenty of customers have had positive experiences with the Apple-Goldman Sachs partnership. In fact, in 2021, Apple announced that Apple Card customers ranked Goldman Sachs and Apple Card “No. 1” in customer satisfaction among the mid-sized credit card market.
However, the reported issues that piled up in the media arguably sullied Goldman Sach’s reputation.
2. Goldman Sachs is bleeding money
According to a mid-October WSJ report, Apple isn’t the only one who is unhappy in this union. “Some senior executives at Goldman want out of what remains of consumer lending—namely, the Apple credit card,” WSJ said in part.
On top of that, Goldman revealed that its Platforms Solutions unit, a collection of businesses that includes Apple Card, lost $1.2 billion in just nine months.
“Inside the bank, partners complain that the consumer-lending business has been more trouble than it was worth, and they blame [CEO David Solomon] for Goldman’s expansion in the space.” WSJ said.
Consequently, Goldman Sachs has been itching to get rid of Apple, according to reports. This brings me to my next point.
3. Goldman Sachs reportedly wanted to dump Apple
In late June, WSJ reported that Goldman Sachs had been chatting with American Express to end its partnership with Apple.
However, this wasn’t a secret to Apple. The report revealed that the Cupertino-based tech giant was well aware that Goldman Sachs was aching to jump ship.
Now, it looks like Goldman Sachs’ reported hunger for freedom has been satiated. As we mentioned at the outset, Apple is reportedly pulling out of its deal with Goldman Sachs.
This is a total 180-degree spin from just a year ago when Goldman Sachs announced an extension of the partnership through 2029.
It’s not clear whether Apple has lined up an issuer to replace Goldman Sachs.
