Apple plans to end a credit card partnership with Goldman Sachs that it once touted as a blockbuster new business

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Goldman Sachs The group, which is trying to spin off its struggling credit card business, has a way out of its current partnership. Apple.

The iPhone maker, which offers credit cards and savings accounts with Goldman, recently sent the financial giant a promissory note, the first step in ending its contract, according to a person familiar with the matter. The process could still take several years, said the person, who asked not to be identified because the discussions are private. The partnership is slated to last for at least another five years.

Goldman Sachs is pulling back into consumer lending after a better-than-expected fallout. The New York-based company said it rushed its efforts and contributed to the missteps. Goldman is expected to terminate the credit card partnership General Motors Co.

For Apple, the partnership was part of a broader push into financial offerings. As sales of its hardware products decline, the company is looking to generate more revenue from services. Apple made up 22 percent of its sales last year, down from less than 10 percent a decade ago.

The iPhone maker remains committed to its Apple Card credit card and savings account and has no plans to discontinue the products — whether Goldman is involved or not — a person familiar with the situation said. According to the person, Apple has not yet reached the stage of talks with potential Goldman replacements.

In a statement, Apple said it is “focused on providing an amazing experience to help our customers lead healthier financial lives.”

“The award-winning Apple Card has been well received by consumers, and we will continue to create and deliver the best devices and services for them,” the Cupertino, California-based company said in a statement.

Goldman Sachs has been exploring options to exit the credit card tie-up this year, people familiar with the matter said earlier. Apple’s proposal would have given the company a way to do that, but it’s a no-deal deal, one of the people said.

Goldman Sachs declined to comment. The Wall Street Journal previously reported that the proposal Apple sent to Goldman could be implemented within 12 to 15 months.

Had a discussion with Goldman Sachs American Express Company to take Apple’s credit card and other services, but that company expressed concern about loss rates, the Journal said. Sync Finance According to the newspaper, he also proposed taking over the credit card program.

Despite the struggles, Apple and Goldman Sachs just Introduced He was promised for a long time High yield savings account In April. And the companies Listed in August The program has reached $10 billion in US deposits.

The savings account has sparked complaints from some users who are unable to withdraw money easily. CEO Tim Cook said in an interview in June that the problem was caused by a security system designed to prevent fraud.

Update, November 28, 2023This article has been updated with additional information.

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