Apple Inc (NASDAQ:AAPL). is set to end its credit card partnership with Goldman Sachs Group Inc (NYSE:GS)., aiming to wrap up their agreement within the next 12 to 15 months. This decision marks a significant shift for the tech giant, which had previously joined forces with Goldman Sachs to offer a credit card in 2019 and a savings account in 2023. The Wall Street Journal, citing inside sources, reported that Goldman Sachs' foray into consumer lending brought about unexpected costs that have led to a strategic reevaluation.
The termination of this partnership will put an end to the products that emerged from the collaboration, including the Apple-branded credit card. Despite the planned exit, Apple has not yet disclosed any details about a new issuer to take over the financial services provided by Goldman Sachs. The move comes after Goldman Sachs experienced significant errors due to the rapid expansion into consumer lending. These errors prompted the bank to consider exiting credit partnerships and to discuss potential handovers with other financial institutions.
American Express Co (NYSE:AXP). and Synchrony Financial (NYSE:SYF) were among the companies approached by Goldman Sachs. American Express showed concern about potential loss rates, and while Synchrony Financial appeared interested in taking over the Apple card program, neither company has provided a public response to the inquiries about their involvement.
Goldman Sachs has not offered any comments regarding these developments, and Apple has remained silent on inquiries for input on their future plans. The news of this strategic shift comes at a time when Apple continues to explore the expansion of its services segment, which includes a variety of digital offerings beyond hardware products. The outcome of these discussions and the future of Apple's financial products remain to be seen as the market anticipates the tech giant's next move.
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