Apple Card and Apple Savings are performing so poorly for Goldman Sachs, one executive has reportedly said that “we should never have done this f****** thing.”
Goldman Sachs invested heavily in its consumer lending projects, most notably on the Apple Card but also in others such as a General Motors credit card. From the start, the company faced problems such as accusations of gender bias in its credit limit calculations — which it has since been cleared of.
There was also just the fact that Goldman Sachs spent $350 for every new Apple Card user. In 2022, Goldman Sachs lost $1.2 billion, chiefly because of the Apple Card.
Add in later issues such as the Consumer Financial Protection Bureau investigating allegations of fraud, and the relationship between Apple and Goldman Sachs deteriorated severely.
Goldman Sachs regrets its Apple deal
Consequently, Goldman Sachs has been working to get out of all of its consumer-facing deals with other firms. One of its last efforts was the Apple Savings account, which despite doubts it would ever happen, finally launched in April 2023.
Now according to the Wall Street Journal, the finance company wants out of even that deal and has been negotiating to sell off all of its consumer products.
Reportedly, even as some Goldman Sachs executives were talking up the Apple Savings deal at launch, others were still against it. “We should never have done this f****** thing,” one partner is said to have told colleagues.
Goldman Sachs has had talks with American Express, but AmEx is said to be concerned about issues such as the Apple Card’s loss rates.
Apple taking over is not an option
The Wall Street Journal says that some Goldman Sachs executives have proposed that Apple itself take on more of the venture. One such possibility would be Apple taking on new card users, while Goldman Sachs maintains current ones.
However, some Goldman Sachs executives have said this option is not being considered. And at neither Goldman Sachs nor Apple has it been discussed at high levels.
According to the Wall Street Journal, some Goldman Sachs executives entirely blame Apple for problems with Apple Card. One example is that unlike other credit cards, all Apple Card bills go out at the same time, at the beginning of the month.
This is reportedly overwhelming customer service staff, and Goldman Sachs has been unable to persuade Apple to change to the normal rolling date.
Goldman Sachs is due to announce its next earnings on Tuesday, October 17, 2023. It is expected to comment on its plans for the consumer division.
Separately, in September 2023, it was revealed that Goldman Sachs and Apple had jointly decided to abandon creating an app for stock-trading investors.
This story originally appeared on Appleinsider
