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Apple is rumoured to have set terms for the termination of its credit card and savings account partnership with Goldman Sachs.
Apple set up termination with Goldman Sachs
Goldman Sachs, which has been trying to jettison its struggling credit card business, now has a potential way out of as Apple recently sent a term sheet outlining what would be a first step toward severing the contract.
The term sheet offered by Apple would create an option to end the current multiyear contract in the next 12 to 15 months, going into effect if Apple is able to find an alternative provider for the two services.
Goldman said in February it would explore “strategic alternatives” for its consumer platform, including credit cards.
Apple and Goldman launched the credit card for US consumers in August 2019, promising a “new level of privacy and security” that would differentiate it from others on the market.
Apple’s savings account, also serviced by Goldman, was launched this year, offering 4.15% annual interest, well ahead of the average rate on US savings accounts already said the service had exceeded $10 billion in deposits.
The two products launched marked a push by Apple to shake up the financial services space, in a direct challenge to the biggest Wall Street banks.
The technology group has a long history of partnering with other companies until it has sufficient expertise to go it alone.
Apple is looking to generate more value from the millions of users of its devices by expanding its service offerings. Its credit card is built into its wallet service, Apple Pay.
More than 75% of iPhone owners already use Apple Pay.
Its partnership with Goldman got off to a bumpy start as the two bumped heads over advertising for the product.
Apple wanted to market the card as “the most secure credit card ever”, but cooler heads at the bank warned that superlatives would open the product up to lawsuits.
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