Apple Inc., the renowned technology giant, is reportedly considering an early termination of its financial services collaboration with Goldman Sachs. This partnership, which encompasses a credit card and savings account, could potentially be concluded 12 to 15 months ahead of schedule, based on information from sources privy to the situation. This development would hinge on Apple's ability to secure an alternative provider for these services.
The initial report of this potential shift was published by The Wall Street Journal. This move aligns with Goldman Sachs' February announcement of seeking "strategic alternatives" for its consumer-facing operations, including credit card services. Historically recognized for its investment banking expertise, Goldman Sachs is now striving to diversify, aiming to augment its asset and wealth management division.
Launched in August 2019 for U.S. customers, the joint credit card offering from Apple and Goldman Sachs was touted for its enhanced privacy and security features, setting it apart from other market competitors. Furthermore, in 2023, Apple introduced a savings account in collaboration with Goldman, offering an attractive 4.15% annual interest rate, significantly higher than the average for U.S. savings accounts at the time. This service quickly amassed over $10 billion in deposits.
These ventures represent Apple's ambitious foray into the financial sector, posing a direct challenge to major Wall Street banks. Apple has a history of collaborating with other entities until it gains enough expertise to independently manage operations, a strategy previously demonstrated in its transition from Intel processors to its own custom-designed chips for Mac computers.
Apple aims to further leverage its vast user base by broadening its range of services. Its credit card is integrated with its Apple Pay tap-to-pay wallet service, which is already used by over 75% of iPhone owners. However, the partnership with Goldman Sachs experienced initial friction, particularly over marketing strategies for the credit card. Apple's proposal to brand it as "the most secure credit card ever" met with caution from Goldman, concerned about potential legal ramifications of such claims. However, the product did go on the attract a mass of users.
While Apple has not officially confirmed these developments, the company stated: "The Apple Card has received excellent feedback from consumers, and we are committed to continuous innovation and delivering top-tier tools and services for them." Goldman Sachs, on the other hand, declined to comment on the matter.
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