Apple’s partnership with Goldman Sachs could be coming to an end…
This is one of the most high-profile partnerships between a tech company and a bank.
The WSJ reported that Apple was the one that severed the deal.
With that said, Goldman has been vocal for many months now about wanting an “exit”.
Their CEO David Solomon, made it clear that consumer banking has been a gigantic money loser for them…
I suspect that Apple was made aware of this and wanted to be the one to take the initiative.
It remains to be seen what the ramifications of this news will be…
Given how pessimistic Goldman Sachs has been about the venture, they will likely leave the consumer banking space altogether.
Apple on the other hand has said that they are here to stay!
Given that the breakup date for the partnership is 12 to 15 months into the future (according to WSJ), Apple will have some time to find a new bank to partner with…
One of the factors that could deter banks from working with Tim Cook’s company is their level of transparency.
Apple allows users to calculate the exact amount of interest that users would need to pay every step of the way.
This is good for consumers…..but not so good for the banks!
Take a look at this breakdown of revenue from various credit card companies in 2019…
A majority of their revenue comes from interest income.
It stands to reason that the higher the transparency the less money they will make!
That’s all for now.
Until Next Time,
-Damian
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