Apple to terminate credit card partnership with Goldman Sachs: Reports

Tech giant Apple is ending its partnership with Goldman Sachs in the credit card business, reported Wall Street Journal and Bloomberg. As per Bloomberg, the iPhone maker which offers credit card and savings account with the Goldman Sachs recently sent a term sheet to the financial giant that would be a first step toward severing the contract.

Apple-Goldman Sachs partnership

While the Wall Street Journal reported that it would take 12-15 months for the contract to end, as per sources quoted by Bloomberg it would take several years. The partnership had been slated to last at least another five years.

Goldman Sachs is looking at ways to pull away from consumer lending business after it proved to be costlier than expected. As per Bloomberg, Goldman Sachs has said that it pushed too quickly into the effort, contributing to missteps. Goldman also is expected to scrap a credit card partnership with General Motors Co.

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Meanwhile, Apple entered the partnership as it was looking to generate more revenue from services as sales of its hardware products slow. Apple got 22% of its sales from that category last year, up from less than 10% a decade ago.

The Bloomberg report also mentioned that the iPhone maker will continue its Apple Card credit card and savings account and doesn’t plan to discontinue the products. Apple in a statement mentioned that it was “focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them”

Contract Termination

As per The Wall Street Journal, Goldman Sachs has held talks with American Express Co. to take over the Apple credit card and other services. However, American Express Co has expressed concerns about loss rates. The Investment Bank is also in touch with Synchrony Financial to take over the business