Mon. Mar 4th, 2024

Though not exactly on record, it’s long been known that Goldman Sachs is unhappy about its partnership with Apple, as it continues to cost it hundreds of millions in losses and wants to split with the iPhone maker.
Earlier this year, Goldman Sachs launched a joint savings account with Apple, and while it met with a great reception by users, the people at Goldman Sachs are not very happy with the company expanding business with Apple. One partner said, “We should have never done this f—ing thing,” during a town hall held just after the launch of the Apple savings account. Others also echoed the same sentiments, reports The Washington Journal.
Goldman Sachs’s foray into consumer lending has not been very fruitful, as the Platform Solutions business, which takes care of Apple Card, resulted in a $3 billion loss, and a billion of it is because of Apple Card. Goldman Sachs spent an exorbitant amount of $350 per new Apple Card user, leading to a loss of $1.2 billion in 2022.
Goldman is selling GreenSky, which it had acquired just last year, at a significant loss. The bank has already divested most of its personal loan portfolio. And now, what is left of consumer lending is the Apple Card and other products it has with Apple, as well as the General Motors credit card. As per some executives, the bank is ditching all these products, exiting the consumer lending business.
According to sources, Goldman has had discussions with American Express about the possibility of a collaboration, offloading these partnerships to them, but no decision has been reached yet. American Express is apparently worried about the loss rates and other issues that Goldman has long trying to address. Also, MasterCard being the network partner is one reason why AmEx is not interested.
Certain executives at Goldman Sachs have suggested that Apple should take on more of the venture, according to the report. One idea is for Apple to acquire new card users while Goldman Sachs continues to maintain current ones. However, some Goldman Sachs executives have denied considering this option. Furthermore, neither Goldman Sachs nor Apple has discussed this at higher levels.
As per a report by the Journal, some executives at Goldman Sachs hold Apple responsible for the issues with the Apple Card. One of the problems they tell is that, unlike other credit cards, all Apple Card bills are generated on the first day of each month. This has led to an increased workload on customer service staff, and despite Goldman Sachs’ attempts, Apple has not agreed to change the billing cycle to a normal rolling date.
During a July earnings call, the Goldman Sachs CEO acknowledged the need to improve the operation of credit-card partnerships. Meanwhile, the head of Enterprise Partnerships, Liz Martin, expressed satisfaction with the Savings account and focus on providing seamless, valuable products to Apple Card customers.
The recently introduced Apple savings account has attracted billions in deposits in a few months. Goldman executives are concerned that the high balances could make it hard for the bank to separate from Apple. If the partnership were to move to a different bank, Goldman would be forced to raise a huge last-minute funding.

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