In a significant development reported by the Wall Street Journal on Tuesday, Apple is set to terminate its collaboration with Goldman Sachs Group for its credit card. Individuals familiar with the matter have revealed that the tech giant has proposed concluding the partnership within the next 12 to 15 months.
Virtual Credit Card Origins: Apple and Goldman’s 2019 Venture
The collaboration between Apple and Goldman Sachs began in 2019 with the introduction of a virtual credit card. The move marked a foray into the financial services sector for both entities, aiming to provide consumers with innovative and digital-first financial solutions.
Comprehensive Termination: Savings Account Included
The termination is not limited to the credit card alone; it encompasses the entire consumer partnership. This includes the savings account, which Apple unveiled earlier this year, offering a high-yield deposit account with a more attractive annual percentage yield compared to Goldman’s online savings account through Marcus.
Evolution of Collaboration: From Expansion to Termination
Initially intended to broaden Goldman Sachs’ consumer base, the collaboration had been extended just a year ago, with the agreement set to stretch through 2029. However, the recent decision to end this partnership signals a shift in strategy for both Apple and Goldman Sachs.
Strategic Moves: Apple’s “Buy Now, Pay Later” Service
Earlier in the year, Apple introduced its “buy now, pay later” (BNPL) service in the United States, facilitated through the Mastercard Instalments program. Notably, Goldman Sachs was identified as the issuer of the Mastercard payment credential, showcasing the evolving dynamics of their relationship.
Revolutionising Credit: The Apple Card Legacy
The Apple Card, born from this collaboration, is a digital-first credit card designed for seamless integration with Apple Pay on devices like the iPhone, iPad, and Apple Watch. With its distinctive physical card made of titanium and lacking visible card details, the Apple Card offers cashback rewards, no fees, and valuable spending insights through the Wallet app on iOS devices.
Looking Ahead: A New Chapter in FinTech
As Apple and Goldman Sachs part ways, the financial services landscape is poised for change. Apple continues to innovate with its BNPL service, and Goldman Sachs, in turn, may reassess its consumer banking strategy. The termination of this collaboration marks a pivotal moment in the evolving intersection of technology and finance.
