The Apple Card and Apple Savings might be a great way to facilitate customers, but Goldman Sachs is finding ways to sever its partnership with the company as the bank is reportedly on the losing end of a deal. One executive hailing from the multinational investment bank said that he regrets the decision made with Apple.
Goldman Sachs reportedly spent $350 per Apple Card user, and in 2022, it lost $1.2 billion thanks to the new service
Investing in consumer products has apparently worked out terribly for Goldman Sachs, according to The Wall Street Journal, with the bank now wanting to get out of a bad deal that it made with Apple. As reported by AppleInsider, for each Apple Card user, the financial services firm spent $350, with its losses reaching $1.2 billion last year. There were even some doubts about the Apple Savings launch, but it did materialize, and that has not helped the business relationship between Goldman Sachs and Apple.
Some executives were against the launch, and now an unnamed individual regrets that Goldman Sachs went ahead with the Apple Savings deal. The firm is said to be in talks with American Express to maintain these services, but the latter is reportedly concerned about the Apple Card’s loss rates. This tumultuous relationship might have also contributed to abandoning a joint app catering to stock-trading investors.
The paywalled report also mentions that Goldman Sachs executives want Apple to push towards the operational side of things, taking on more responsibility in registering Apple Card users while the bank maintains the current customers. However, the executives have denied that such an option is being discussed. However, some senior-level personnel at Goldman Sachs believe that the problems associated with Apple Card are entirely Apple’s fault.
One instance is that Goldman Sachs’ customer service employees are being completely overwhelmed by the billing time. Unlike other credit cards, Apple Card bills are issued to all customers simultaneously, meaning that millions of invoices are electronically sent, creating a burden for the staff during the registration and resolution of complaints.
While we do not have the exact status of the rocky relationship between the two companies, we may hear more about the consumer division during Goldman Sachs’ October 17 earnings call. We will know if it wishes to maintain the Apple Card and Savings services shortly.
News Source: The Wall Street Journal