Goldman Sachs, Apple’s partner for the Apple Card and Apple’s Pay Later, has been in talks with American Express “for months” to hand over the partnership. According to The Wall Street Journal which broke the news, Goldman Sachs has been trying to scale back consumer operations since last year and its tie-up with Apple is a part of that.
The sources who leaked the information warned that a deal between the two banks is not imminent or assured and even if they do reach an agreement, the switch needs the blessing of Apple which recently extended the partnership with Goldman until the end of the decade.
The issue seems to be with Goldman Sachs rather than Apple in this case. According to the WSJ, Goldman CEO David Solomon has been internally criticized for focusing on its consumer business so heavily which has generated losses of $3 billion since 2020.
Aside from potentially handing off its Apple partnership to American Express, the company is looking to sell its home improvement lending business GreenSky and has already stopped issuing personal loans. While it"s nixing several consumer-facing products, it looks to be keeping its Marcus savings account.
Many of the products that Apple Card offers encourage spending such as Pay Later and Daily Cash Back, it does offer Savings in collaboration with Goldman Sachs which offers 4.15% interest (APY) on your savings. With the cost of living going up dramatically with inflation, having savings keep up as much as possible with inflation is important.
Ultimately, if Goldman Sachs and American Express do agree on a deal and Apple approves it, not too much should change for customers. Borrowing and savings rates may be affected and it’s possible that new cards might have to be issued, but that should be about it for consumers.
Source: The Wall Street Journal