A source with knowledge of the situation told CNBC’s Leslie Picker that Apple has sent Goldman Sachs a proposal to sever its relationship with credit cards and savings accounts within the next 12 to 15 months.
In the event that it transpires, the action would essentially terminate one of the most prominent collaborations between a financial institution and an internet startup.
It would also imply that Apple would have to look for a new banking partner for its high-yield savings accounts and well-known credit card, the Apple Card, both of which are sold under the Apple name. Goldman Sachs manages the banking backend even though Apple provides both its credit card and savings account through the iPhone wallet app.
Goldman Sachs CEO David Solomon was there at Apple’s glamorous California campus launch event in 2019, the year the company initially introduced the Apple Card.
But as expenses mounted, Goldman Sachs, led by CEO David Solomon, withdrew from its earlier aspirations in consumer banking, making the relationship difficult in recent years. Authorities have also investigated Goldman’s billing practises, refund policies, and claims of discriminatory practises against women in setting credit limits.
Goldman Sachs declared earlier this year that it will “explore strategic options” for its section of consumer banking.
Credit cards and savings accounts are ways for Apple to monetize its rapidly expanding services company while also giving its iPhone more functionality and value. In the event that it were to sever ties with Goldman Sachs, it’s unclear if Apple has identified a new partner or would contemplate making more significant adjustments to its financial products.
Source (CNBC)
