The tech giant has proposed an exit from the contract within the next 12 to 15 months, marking a swift turnaround for a program that was initially extended through 2029, The Wall Street Journal (WSJ) reported Tuesday (Nov. 28).
Apple did not immediately reply to PYMNTS’ request for comment.
Goldman Sachs entered the credit card space in 2019, causing concerns among consumer banks about the emergence of a new competitor, according to the report. However, four years later, the firm is pulling back.
The retreat began at the end of last year after Goldman suffered significant losses in its attempt to build a full-service consumer operation, the report said. By early this year, the bank had informed Apple of its intention to offload the partnership.
While it remains unclear whether Apple has already lined up a new issuer for its credit card, Goldman has reportedly discussed the possibility of handing over the program to American Express, per the report. However, Amex has expressed concerns about certain aspects of the program, including its loss rates.
Another potential candidate is Synchrony Financial, the largest issuer of store credit cards in the U.S., which has been actively seeking partnerships with tech companies, according to the report. Synchrony initially competed against Goldman for the Apple credit card program.
For Apple, the termination of the credit card partnership represents a setback for its services business, which the company has increasingly relied on as iPhone sales slow down, the report said. The Goldman partnership likely represents only a small portion of Apple’s overall revenue stream, however. In the September quarter, Apple’s overall sales were down less than 1% annually, while services revenue increased by about 16%.
Goldman Sachs’ retreat from consumer lending represents a step back from its ambitions to serve the broader market, per the report. In addition to ending the Apple credit card partnership, Goldman has also decided to terminate its credit card partnership with General Motors. The bank has been selling off its personal loan balances and is now refocusing on its core clients — big corporate and investor clients and the world’s wealthiest people.