Apple to end Goldman Sachs credit card deal

Apple will end its credit card program with Goldman Sachs in the next 12–15 months, multiple media outlets reported Tuesday, citing sources familiar with the deal.

Apple launched the Goldman-backed card in 2019 to consumer fanfare alongside a flashy ad campaign promising a credit card not from a bank, where nearly any Apple customer could get credit.

The fall-through of the deal marks a major setback for Goldman, which has invested heavily in recent years in attempts to pry into the consumer credit industry. 

It’s a stark turnaround from news last October, when Goldman announced its Apple partnership would last until at least 2029. 

Goldman was overwhelmed by the size of the consumer credit partnership, The Wall Street Journal reported, and discussed handing off the program to American Express and other suitors as it struggled to scale the required customer service and back-end resources. 

Those consumer credit investments for Goldman now appear to have failed, with the company previously killing off its General Motors-partnered credit card earlier this month.

The company has lost $3 billion on consumer banking since 2020, it announced in January, mostly funds set aside to cover consumer loans that fall through.

“I think it became clear to us early in 2022 that we were doing too much, it was affecting our execution,” said David Solomon, Goldman’s chairman and CEO, in a call with analysts in January.

For Apple, the end of the partnership could be an obstacle to increasing service revenue, a key sector for the company as product sales continue to drop over time. Product sales went down by a percent in the last year, according to the most recent quarterly report, as service revenue climbed 16 percent in the same period.

Apple is expected to continue a credit deal with a new banking partner, though it is unclear which of the company’s suitors will succeed in finding an agreement.