Amidst a backdrop of billion-dollar losses from failed consumer lending ventures, Goldman Sachs seems to want out of its partnership with Apple, with one executive reportedly claiming “we should never have done this f–king thing”.
Apple Card alone – with its 3% cash back deals and pay-later schemes – is reportedly responsible for $1 billion in losses for Goldman Sachs, while the high-interest savings account offered to Apple customers also losing money and causing issues for the bank.
The Wall Street Journal reports that consumer lending in general is seen as a misstep for Goldman Sachs, who historically have relied on more profitable business from Wall Street. The consensus seems to be that the bank wishes to get out of its partnership with Apple as soon as possible, although the success of its savings accounts – which offered around 10x the national average interest rate – makes it difficult for Goldman Sachs to jump ship.
Some executives have suggested that Apple should start fronting its own money for credit card lending – it certainly isn’t short of cash – while pawning off the lending responsibility to American Express is seen as another option.
Whether this will mean big changes for Apple Card and its savings account is hard to say, but the signs aren’t good for a lasting partnership. Take advantage of those high rates while you can!