Apple Card and Goldman Sachs Partnership Ending Sooner Than Expected; CEO Confirms Agreement Was Meant to Last Until 2030

The once-promising alliance between Goldman Sachs and Apple Card seems to be deteriorating swiftly, with indications that the partnership may terminate well before its originally slated expiration. According to Goldman Sachs’ CEO, the collaboration is expected to conclude far sooner than anticipated.

Challenges Within Goldman Sachs’ Apple Card Venture

Goldman Sachs initially integrated the Apple Card into its platform solutions division; however, this segment has faced significant financial challenges, reporting an astounding net loss of $859 million in 2024. As shared by Reuters, CEO David Solomon conveyed during a recent earnings call that the Apple Card will likely not continue as a product for customers moving forward.

Despite the existing contract allowing the partnership to run until 2030, Solomon hinted at the potential for early termination. This comes after a series of struggles, where Goldman Sachs has been exploring options to extricate itself from the arrangement focused on a product that has seemingly become a financial burden.

Apple Card’s Impact on Goldman Sachs’ Finances

The drastic losses associated with the Apple Card venture have not gone unnoticed within the bank. In 2022, reports indicated that Goldman Sachs incurred losses amounting to approximately $1.2 billion, with customer acquisition costs averaging around $350 each. The latest data reveals that the platform solutions unit continues to suffer from the Apple Card’s financial impacts, resulting in an $859 million net loss this past year.

Moreover, Solomon noted that the Apple Card had adversely affected the bank’s equity returns by a staggering 75 to 100 basis points last year. However, there is some optimism that these figures might improve in 2025 and 2026, suggesting that the bank is looking towards recovery from this venture’s losses.

Looking Ahead: Apple Card’s Search for a New Partner

Given the current circumstances, Apple Card now requires a new banking partner to sustain its array of services for customers. Reports have indicated that JPMorgan Chase could potentially step in to fill this gap. However, negotiations may necessitate certain conditions, such as a reduction in the $17 billion face value owed by Apple Card cardholders.

It is likely that discussions between Apple and various financial institutions are underway, but specifics remain undisclosed. Should any major developments emerge from these talks, we will promptly inform our readers, so stay tuned for further updates.

News Source: Reuters

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