Apple has proposed to end the credit card and savings account collaboration it has with Goldman Sachs in the time period of 12 to 15 months. This initiative, if it were to be implemented, would signify the conclusion of one of the most notable unions between a tech company and a bank.
Apple has reportedly presented Goldman Sachs with a plan to terminate their credit card and savings account joint venture within the next year to 15 months, according to a person familiar with the details. If this were to happen, it would effectively end one of the premier partnerships between a bank and tech firm. Apple Card and Apple-branded high-yield savings accounts would require a new financial partner if the agreement with Goldman Sachs is not extended. Although Apple puts forth both its credit card and savings account via the iPhone wallet app, banking operations are dealt with by Goldman Sachs. At the lush launch of the Apple Card in 2019, Goldman Sachs CEO David Solomon was in attendance at Apple's California campus. Despite this, the alliance has been shaky lately as Goldman Sachs, with Solomon in command, has reduced its earlier consumer banking plans amid mounting costs. Goldman Sachs has also been under the microscope of regulators for the manner in which refunds and billing mistakes are managed and over supposed gender discrimination in setting credit limits. In the start of this year, Goldman Sachs clarified it would "look into strategic alternatives" for its consumer banking sector. For Apple, the credit card and savings accounts are a route of providing extra value and features to its iPhone, and to rapidly bolster its services business with fees. It is not clear whether Apple has identified a new partner or contemplate bigger modifications to its financial products if it were to discontinue the relation with Goldman Sachs.Representatives from both Apple and Goldman Sachs declined to comment. A statement from Apple made to CNBC stated they and Goldman Sachs are "focused on delivering an incredible experience for our customers to help them lead healthier financial lives. The acclaimed Apple Card has been welcomed positively by customers and we will carry on with innovating and giving the best tools and services for them."The story was originally published by The Wall Street Journal.
Apple has reportedly put forward a plan to Goldman Sachs to end their credit card and savings account collaboration within the next 12 to 15 months, according to an individual with knowledge of the situation. If this occurs, it will mean that the partnership between a tech company and bank - one of the most prominent of its kind - will come to a close. Apple Card and Apple-branded high-interest savings accounts will then require a new financial partner should the agreement with Goldman Sachs not be extended. While Apple Card and savings accounts are accessible through the iPhone wallet app, Goldman Sachs is responsible for the banking operations. At the 2019 Apple launch event held on their California campus, Goldman Sachs CEO David Solomon was present. However, the partnership has experienced difficulties in recent times as Goldman Sachs, under the guidance of Solomon, has pulled back from its earlier consumer banking ambitions due to rising costs. Goldman Sachs' methods for handling refunds and billing mistakes, as well as alleged gender discrimination in credit limit setting, have been subject to regulatory scrutiny. This past January, Goldman Sachs announced it would "examine strategic alternatives" for its consumer banking services. Apple views the credit card and savings account as a means of adding value and extra features to the iPhone, as well as boosting its services business with fees. It remains unclear if Apple has identified a new partner or mulls over greater changes to its financial products if it chooses to terminate the deal with Goldman Sachs. Representatives from both Apple and Goldman Sachs declined to comment. A statement from Apple to CNBC expressed they and Goldman Sachs are "focused on giving an incredible experience for our customers to aid them in leading healthier financial lives. The highly-regarded Apple Card has seen a positive reception from customers and we will continue to innovate and provide the best tools and services for them." The Wall Street Journal was the first to report this story.
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