Goldman Sachs, Apple's banking partner for its credit card and high-yield savings account, is seemingly having doubts about those products. According to The Wall Street Journal, Goldman is looking to get out of the consumer lending business, which could have implications for Apple Card and the associated savings account.
The report suggests that several senior Goldman executives want the company to ditch its remaining consumer lending products — those it offers with Apple as well as the General Motors credit card. No final decision is said to have been made, though the future of Goldman's consumer products may become a little clearer when the finance company reports its quarterly earnings on Tuesday.
Consumer lending efforts such as Apple Card may have been a mistake for Goldman. The business unit that oversees those and GreenSky (a "buy now, pay later" company Goldman bought for around $2.2 billion last year and is selling at a loss) has lost billions of dollars.
Meanwhile, Goldman has run afoul of regulators. The Consumer Financial Protection Bureau has investigated Goldman's handling of credit card billing errors and refunds. Unlike with other card programs, Apple Card bills go out at the beginning of each month. That's said to put more pressure on Goldman customer service workers who deal with complaints and billing issues. Issuing bills on a rolling basis may alleviate that strain. However, Goldman has reportedly been unsuccessful in convincing Apple to move to a more typical billing cycle.
If Goldman isn't able to reduce expenses for its credit cards, it may try to sell the Apple and GM partnerships, according to the report. That may prove a difficult prospect, given that customers have deposited billions of dollars into Apple savings accounts. If Goldman manages to get another bank to take over the Apple partnership (including those hefty savings accounts), the Journal noted that the finance company may have to raise expensive emergency funding to cover any shortfall.
Goldman is said to have had talks with American Express about taking over its consumer products. However, Amex reportedly has concerns regarding the Apple Card’s loss rates and other factors Goldman has been attempting to remedy. Amex leaders are also said to have bristled at the fact the Apple Card operates on the Mastercard network.