Goldman Sachs Moves to Exit Apple Card Venture, According to Latest Reports
Goldman Sachs' Apple Card Troubles: Could AmEx Step In?
It looks like the Apple Card partnership might be on the brink for Goldman Sachs. The Wall Street Journal reported on Monday that the partnership is causing internal pressure for Goldman to exit the consumer-lending space. A Goldman partner was quoted saying, "We should have never done this f-ing thing" about the recently launched Apple savings accounts.
The chat is heating up as Goldman faces stiff pressure to slash losses. If the bank's earnings for the quarter are as bad as analysts predict, Apple's financial products could see the chopping block. Senior execs are pushing to get out of consumer lending, and Apple's offerings might be offloaded to another bank — possibly American Express.
Goldman's stock has taken a hit this year, down 11% in 2023, despite the entire banking industry taking a dive. An index for America's largest banks fell 24% in 2023 due to regional bank collapses, higher interest rates, and increased regulation, while the S&P 500 saw a 14% rise.
Remember when Goldman CEO David Solomon called the Apple Card's launch the "most successful credit card launch ever" back in 2019? Times have changed. Many Goldman execs are now questioning the wisdom of the foray into consumer banking.
What's keeping Apple around at Goldman right now is the wildly popular high-yield Apple savings accounts. Billions of deposits made the bank think twice before severing ties with Apple. However, if Goldman were to back out of the Apple deal, they'd have to scramble for some expensive capital to fill the gap.
Solomon's partnership with Apple hasn't been all smooth sailing. His focus on consumer lending and lack of attention to traditional banking staples have earned him intense scrutiny from Goldman partners. And with the recent sale of Green Sky, another consumer lending platform, at a steep discount, some are calling for Solomon's removal.
The Competitive Landscape: AmEx Looming?
With Goldman's Apple Card partnership under fire, the race is on for potential successors. American Express has emerged as a serious contender, according to recent reports, but complexities remain:
- Visa offered $100 million to replace Mastercard as the card's payment processor. American Express is also bidding for the network role, aiming to serve as both issuer and payment network.
- JPMorgan Chase, Synchrony, and Barclays are frontrunners to replace Goldman as the banking partner. While Amex seeks the network role, no evidence suggests it's eyeing the banking partnership.
The Next Move: Navigating Challenges
The original Goldman-Apple deal faced hurdles like credit risk management and regulatory penalties. Any successor must strike a balance between maintaining a seamless user experience and dealing with the realities of consumer lending economics. As of April 2025, American Express appears poised for the payment network role, though the final configuration is still up in the air. The separation of network and issuer responsibilities suggests multiple partners may ultimately be involved.
- Amidst Goldman Sachs' Apple Card troubles, technology giants like American Express are eyeing the potential future of the partnership, as Goldman faces pressure to exit the consumer-lending space.
- In the competitive landscape for the Apple Card, American Express has emerged as a serious contender, with Visa offering $100 million to replace Mastercard as the card's payment processor and American Express bidding for the network role.
- JPMorgan Chase, Synchrony, and Barclays are also frontrunners to replace Goldman as the banking partner, while American Express seeks the network role, not the banking partnership.
- The next move in navigating the challenges of the Goldman-Apple partnership requiresbalancing the need for a seamless user experience with the realities of consumer lending economics, as the final configuration remains unclear in 2025.
- As Goldman considers exiting the consumer-lending space, technology behemoths like American Express are positioning themselves for potential distractions in the future of finance and business technology.
- With Goldman facing criticism for their focus on consumer lending and lack of attention to traditional banking staples, the tech-savvy future of the finance industry could yield unexpected complications and changes in the coming years.
