Goldman Sachs CEO David Solomon told analysts on an earnings call that there is “some possibility” that the company’s Apple Card partnership with Apple could end early, reports Reuters.
The contract between Apple and Goldman Sachs is supposed to run until 2030, but the financial services company is looking to get out of the consumer banking game, and thus its Apple Card deal.
In June 2023, we reported that Goldman Sachs was looking to pull out of its Apple Card partnership with Apple. Goldman Sachs has acted as the financing partner for the Apple Card credit card in the United States, Apple Pay Later, and the Apple Savings account that Apple Card users can open. That means Apple will need to find a replacement partner for all of these services before it can break away from Goldman Sachs.
In November 2023, The Wall Street Journal reported the Apple was looking to pull out of its deal with Goldman Sachs in the next 12 to 15 months. While the 12 month mark has already passed, and 15 months will be up at the end of February, but there hasn’t been anything concrete revealed about the dissolution of the partnership.
While Goldman Sachs initially was in talks with American Express about taking over the relationship with Apple, the Apple Card is contractually required to run on the Mastercard network until 2026. Apple has also discussed a possible deal with both Caoital One and Synchrony Financial, those talks have not panned out.
In September 2024, we reported that Apple was in talks with JPMorgan Chase about taking over the Apple Card operations, but it could take several months for a deal to be hammered out.
A deal between Apple and JPMorgan would deepen the already existing relationship between the two companies. JPMorgan already pays Apple a fee whenever one of its credit card customers uses one of their cards in Apple Pay and Chase is one of the banks holding Apple’s $60 billion stockpile of cash. The financial firm also offers an Ultimate Rewards program that provides discounts on Apple products to Chase customers.
If talks are successful, Chase will see a healthy boost in its credit card customer numbers, adding Apple’s popular credit card user base of 12 million users to the millions of cards it has already issued. Chase will also gain access to loyal Apple customers, while Apple, will find a new issuer for its credit card.
Goldman Sachs and JPMorgan will need to agree on the terms and conditions of the card transfer. The pair will need to agree on a transaction price for the existing card balances. Another negotiation sticking point could include the current consumer rewards program connected to the Apple Card.
The Apple Card deal is not the only partnership that Goldman Sachs is looking to get out of, as the firm is also looking to offload its other credit card partnerships to another company, such as the one it offers to General Motors customers.
JPMorgan would also like to shut down some parts of the Apple Card program, including the requirement that all cardholders receive their statement at the beginning of the month. Goldman Sachs faced customer service issues connected to the somewhat unusual billing structure, causing it to face regulatory scrutiny of its consumer loans business.
