There was a lot of interest when Apple introduced Apple Card with Goldman Sachs, but the Cupertino credit card never expanded beyond the US. Goldman Sachs now wants to quit its involvement in the Apple Card and savings business and is in talks with American Express to sell this part of its business.
Can American Express finally help deliver an international presence for Apple Card?
Goldman Sachs seeks an Apple Card exit
Indeed, Apple’s partner appears to be abandoning its consumer banking business following its money-losing $2.24 billion purchase of consumer finance company GreenSky, a deal on which it may yet lose billions. The company reportedly had big problems scaling up to become a consumer-facing digital retail bank.
Apple, Goldman Sachs, and American Express won’t comment on the speculation, first highlighted by the Wall Street Journal. But, in October, Apple and Goldman renewed their partnership until 2029, following up on their then-strengthened alliance with the introduction of Apple Card Savings, a high-yield savings account for Apple Card users. The latter allegedly attracted more than $1 billion in deposits within just four days.
That big result doesn’t disguise that Goldman Sachs lost over a billion dollars in the first nine months of 2022 on the business unit behind Apple Card. In addition, reports that customers sometimes had to wait weeks to take cash out of their savings account dented the service’s halo.
The Apple connection didn’t generate profitable revenue as swiftly as the partners had originally intended — though given the attention the link generated along with the tens of millions saved, the arrangement also managed to be a success.
Perhaps the problem was around scale. What if the purported talks with American Express weren’t just about reading the last rites for Goldman Sachs and Apple Card, but instead about christening a new and international ramp for the service?
American Express recently said that spending by millennials and Generation Z customers increased 28% in Q1, accounting for more than 60% of new Amex accounts. The company has said it is looking to invest in such customers.