Apple Calls Off Credit Card Tie-Up With Goldman Sachs, Sets 12-15 Month Timeline For Split: WSJ

Apple Inc. AAPL has reportedly made the call to conclude its credit card alliance with Goldman Sachs Group GS. 

What Happened: Apple has proposed a plan to terminate its collaboration with Goldman Sachs. The plan is to dissolve the partnership over the next 12 to 15 months, the Wall Street Journal reported, citing people briefed on the matter. 

This development comes almost four years after the companies initiated their digital credit card service in 2019. 

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The proposed termination will impact the credit card service and the savings account product launched earlier this year. The partnership was previously extended in 2022, with a contract to continue until 2029.

Reacting to the developments, Apple stated that both companies remain committed to providing excellent customer experiences and will persist in innovating and offering top-tier services and tools. 

Earlier this year, Apple presented a high-yield deposit account offering a better annual yield than Goldman’s Marcus online savings account. The tech behemoth also rolled out a “buy now, pay later” or BNPL service in the U.S. via the Mastercard Installments program.

Why It Matters: This decision by Apple comes as Goldman Sachs has been reassessing its consumer lending efforts. 

In October this year, it was reported that Goldman Sachs was reconsidering its venture into consumer lending, a move initiated by launching a joint savings account with Apple. 

The bank faced internal dissent and operational challenges, prompting a reevaluation of this strategic direction.

Earlier this month, it was reported that Goldman Sachs had prepared to offload its General Motors credit card program. As per the report, Goldman Sachs tried to spend less money on its card programs but didn’t reach those goals. 

This broader reassessment of its consumer lending efforts by Goldman Sachs may have influenced Apple’s decision to terminate the partnership.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.