Apple will end its credit card program with Goldman Sachs in the next 12 to 15 months, multiple media outlets reported Tuesday, citing sources familiar with the deal.
Apple introduced the Goldman-backed card in 2019 to consumer fanfare, along with a flashy advertising campaign that promised a credit card not from a bank where almost any Apple customer could get a loan.
The deal’s collapse represents a major setback for Goldman, which has invested heavily in recent years in attempts to penetrate the consumer lending industry.
This represents a significant turnaround from the news last October, when Goldman announced that the Apple partnership would last at least until 2029.
As the Wall Street Journal reported, Goldman was overwhelmed by the size of the consumer lending partnership and discussed handing the program over to American Express and other suitors as the company struggled to scale the required customer service and back-end resources.
Those consumer credit investments for Goldman now appear to have failed after the company discontinued its General Motors-affiliated credit card earlier this month.
As the company disclosed in January, the company has lost $3 billion from retail banking since 2020, with most of the funds set aside to cover failed consumer loans.
“I think it became clear to us in early 2022 that we were doing too much, which was impacting our execution,” Goldman Chairman and CEO David Solomon said in a call with analysts in January.
For Apple, the end of the partnership could be a hindrance to increasing services revenue, a key sector for the company, as product sales continue to decline over time. According to its latest quarterly report, product sales fell 1 percent last year, while service revenue increased 16 percent over the same period.
Apple is expected to pursue a loan agreement with a new banking partner, although it is unclear which of the company’s suitors will reach an agreement.
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Originally posted 2023-11-29 04:34:12.