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Recent rumors have suggested that Goldman Sachs is aiming to end its financial partnership with Apple, and The Information today shared a new report on what went wrong and why the relationship between the two companies fell apart.
Goldman Sachs is Apple’s partner on the Apple Card, the Apple Savings account that is open to Apple Card users, and Apple Pay Later, Apple’s buy now, pay later service that is being beta tested. Apple and Goldman Sachs have worked together since the Apple Card launched in 2019, but the venture is not making Goldman Sachs enough money, and Goldman Sachs’ customer service issues with the Apple Savings account are impacting Apple’s reputation.
Former employees at both companies who worked on the Apple Card said executives weren’t prepared for how difficult it would be to combine Apple’s West Coast tech approach with Goldman’s New York-style banking culture. While Apple was more focused on the sleek technology and product pizazz that drew in customers and kept them happy, Goldman prioritized regulatory compliance and profitability.
Apple had a lot of demands that were atypical for credit cards and led to development problems ahead of when the Apple Card launched, including billing statements that lined up with calendar month, instant cash back rewards (did not launch), and the design of the physical card and customer agreements.
In one anecdote relayed by The Information, Goldman Sachs and Apple ran into a glaring issue. Apple CEO Tim Cook was testing the service and was not able to get approved for an Apple Card. The Goldman Sachs underwriting process rejected his application because he is a high-profile figure that is regularly impersonated, and flags on his credit bureau accounts caused issues.
Goldman Sachs was able to make a one-off exception, but internally, there were other issues that Goldman Sachs was dealing with that eventually led to an investigation by the U.S. Consumer Financial Protection Bureau (CFPB). Goldman Sachs ended up with more disputed transactions than anticipated, and customers were receiving conflicting information or long wait times for dispute resolutions.
Shorty after the Apple Card launched,…