Apple is set to finish its credit card partnership with Goldman Sachs, according to a Wall Street Journal report published on Tuesday.
People claiming to have knowledge of the matter told the Journal that Apple’s contract with the banking giant will end “in the next roughly 12-15 months,” bringing to an end a troubled tie-up that left Goldman with greater costs than expected.
Affected products include the Apple Card, Apple Savings account, and Apple Pay Later. It’s not currently clear if Apple has already arranged for another bank to take Goldman’s place or if it’s still searching for a replacement.
The Journal said that Goldman had earlier discussed the idea of handing the partnership to American Express but it’s not clear if that will come to anything, with Amex apparently concerned about the program’s loan loss rates.
Synchrony Financial, which is the largest issuer of store credit cards in the U.S., has also been exploring the idea of taking over Apple Card operations, the report said. Notably, Synchrony bid against Goldman for the Apple credit card program at the outset, so don’t be surprised if it does take over the role.
Apple launched the Apple Card in 2019 and it’s now believed to have around 10 million users. The card was followed by a high-yield savings account earlier this year, with both the card and the account backed by Goldman. But from the start, different approaches to the program reportedly caused difficulties in the relationship between Apple and the bank, with reports over the summer suggesting the partnership was in trouble.
In January, for example, reports suggested that Goldman’s partnership with Apple had cost the bank more than $1 billion in losses. The Journal also said that Goldman executives cited the relationship with Apple as the cause of increased regulatory scrutiny over “credit card account management practices.”
Other issues included Apple’s apparent insistence that cardholders should receive their bill at the same time — at the start of the month — instead of on a rolling basis, which is what most other card programs do. The timing meant that Goldman would receive a surge of calls at the start of the month, causing challenges for customer service staff.
Apple and Goldman Sachs have not commented on the Journal’s report. Digital Trends has contacted both companies and we will update this article when we hear back.
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