Goldman Sachs Wants to End Apple Partnership, American Express Might Take Over

[MacRumors]

Goldman Sachs does not want to continue its partnership with Apple, according to a new report from The Wall Street Journal. Apple has teamed up with Goldman Sachs for the Apple Card credit card in the United States, Apple Pay Later, and the Apple Savings account that Apple Card users can opt for.

The banking company wants to cut back on its consumer business, and is now in talks with American Express (or Amex) about a potential takeover. A deal would see Goldman Sachs offloading its credit card partnerships to another company, which would include the Apple Card and other credit cards like one it offers for General Motors.

American Express has not yet established an agreement with Goldman Sachs, and a deal is not "imminent or assured," according to people who spoke to The Wall Street Journal.

Goldman Sachs recently extended its partnership with Apple through the end of the decade. Apple would have to agree to a transfer, and is aware of the talks that Goldman Sachs has been having with Amex.

Article Link: Goldman Sachs Wants to End Apple Partnership, American Express Might Take Over

 

[sniffies]

That sachs.

Oh well.

 

[Sheepish-Lord]

Calling BS

 

[cannono]

Not surprising - Goldman has failed to make profit on their consumer mass market products. They shut down their Marcus personal loans product recently and only are finishing existing accounts now.

 

[Think|Different]

Whoa, that's genuinely crazy to read. GS never seemed like a great fit, though clearly 'good' enough to launch (much like Cingular Wireless for another launch once upon a time, LOL). I love my Apple Card but have a defined usage for it, much like my Gold and Plat AMEX cards...I wouldn't terribly mind the Apple Card being 'ported' over to American Express but that seems pretty OUT THERE to suggest that could happen any time soon.

 

[MacDaddyPanda]

Is that only for the Apple Card or Apple Savings as well?

 

[GMShadow]

Not surprising - Goldman has failed to make profit on their consumer mass market products. They shut down their Marcus personal loans product recently and only are finishing existing accounts now.

Goldman's CS is terrible as well, because they thought they could do it on the cheap.

 

[cannono]

That sachs.

Oh well.

How so? This was their first foray into consumer cards and they’ve spent four years losing money at it. Their other consumer products lose money too - they’ve explained on investor calls that they haven’t managed to make it work. They want to stick to their successful markets with investors and businesses.

 

[terrapin_nation]

I wonder where this leaves Apple Card and savings account users.

 

[techno-Zen]

If it's AMEX.. I'm OUT

 

[isomorphic]

Honestly I'd prefer AmEx to GS. I was sad when Costco switched from AmEx to Citi.

 

[MacDaddyPanda]

$1Billion loss. I wonder how that is? Where is the revenue coming from? Just transaction fees? So another article does say both Apple Card and Apple savings. That seems rather unfortunate since they just recently launched the savings account.

 

[Maclver]

Im guessing whoever takes over it would be a seemless transition for existing card holders?

 

[sw1tcher]

And people wonder why Apple Card and Apple Savings isn't available in Europe, UK, Canada, etc. Like I said before, Goldman gave Apple a sweet one-sided deal no other banks are willing to give.

I think the recent bank stress test results was a wake up call for Goldman execs

Federal Reserve says 23 biggest banks weathered severe recession scenario in stress test

Begun in the aftermath of the 2008 financial crisis, the Fed's annual stress test dictates how much capital the industry can return to shareholders.

www.cnbc.com

Goldman’s credit card losses

Losses on loans made up 78% of the $541 billion in projected losses, with most of the rest coming from trading losses at Wall Street firms, the Fed said. The rate of total loan losses varied considerably across the banks, from a low of 1.3% at Charles Schwab to 14.7% at Capital One.

Credit cards were easily the most problematic loan product in the exam. The average loss rate for cards in the group was 17.4%; the next-worst average loss rate was for commercial real estate loans at 8.8%.

Among card lenders, Goldman Sachs’ portfolio posted a nearly 25% loss rate in the hypothetical downturn — the highest for any single loan category across the 23 banks — followed by Capital One’s 22% rate. Mounting losses in Goldman’s consumer division in recent years, driven by provisioning for credit-card loans, forced CEO David Solomon to pivot away from his retail banking strategy.



It's all those sub-prime customers who signed up and got approved for an Apple Card

Goldman’s Apple Card business has a surprising subprime problem

Goldman's consumer business has had a bumpy ride as of late, marked by mounting losses, leadership turnover and missed product deadlines.

www.cnbc.com

 

[KPOM]

I wonder where this leaves Apple Card and savings account users.

If AMEX strikes a deal they will likely take over the card and savings accounts.

 

[jarman92]

I don’t particularly care either way, but swapping out MasterCard for AmEx is not a 1:1 trade—the AmEx network sucks. Apple and/or Goldman and/or AmEx better be offering some serious perks to keep customers around if they switch.

 

[Brad7]

“Waahh, Apple isn’t greedy enough for us!” -GS

 

[The Barron]

Apple blew it at the "get go." They should have gone with BofA or CitiBank and then they would not be in this predicament. Ooof!

 

[thinkthis]

I don’t particularly care either way, but swapping out MasterCard for AmEx is not a 1:1 trade—the AmEx network sucks. Apple and/or Goldman and/or AmEx better be offering some serious perks to keep customers around if they switch.

Agreed - AmEx has higher transaction fees and as such a lot of places do not accept them. Would be a serious downgrade IMO. AmEx has it's uses, but it is not a one size fits all solution that would need to be used for Apple Pay.

 

[hoodafoo]

I only signed up for the card to get the fancy piece of titanium

 

[TheYayAreaLiving 🎗️]

I love my American Express card. Their customer service is top-notch. Their #1 priority is the customers and that’s why I’ve been with them for over 10+ years!

 

[kildraik]

All for AMEX. Add it to my Platinum and Gold, please. This would like mean better benefits as well, because quite frankly, there are none with GS/MC.

Even better if Platinum members could claim extended warranties and accidentals on financed Apple Card purchases. One can dream!

 

[KENESS]

Edit: I complained about the headline being unnecessarily sensational considering it isn't specifically its "Apple partnership" GS wants out of, it wants out of the consumer card business entirely which includes several partners other than Apple, too. But, I decided I just didn't want to get into it right at the start of a hopefully relaxing weekend. So, happy Friday everyone!

 

[Realityck]

And people wonder why Apple Card and Apple Savings isn't available in Europe, UK, Canada, etc. Like I said before, Goldman gave Apple a sweet one-sided deal no other banks are willing to give.

The Apple Savings was the first thing I was thinking about with Goldman Sachs wanting to bow out. It seemed like Apple was making what they offered too expensive to operate vs other credit card transaction fees/rewards. Recently I seen banks want a higher fee (4%) where lots of automatic payment arrangements are dropping credit cards vs debt cards. This might be an instance that Apple got too aggressive to partner with for banks. Yes Banks are spoiled with their current credit card fees and paying low interest on savings.

 

[TheYayAreaLiving 🎗️]

If all goes well with American Express. Can we please get a Rose Gold Apple card?