Apple Inc. is set to sever its links with Goldman Sachs as its primary financial services partner, with Chase lined up for a new partnership.
As reported by Bloomberg, the turbulent relationship is to conclude following delays, anger, and significant losses.
ReadWrite previously featured developments in the relationship between Apple and Goldman Sachs, which began in 2019 when it was announced that the tech giant was to end its credit card agreement with the global finance house over the next 12 to 15 months.
What is the breaking point in the Goldman Sachs business relationship?
The news represented a setback for Apple regarding its services venture. Still, it was a more costly venture for Goldman as they lost billions while trying to scale up the consumer market — as they attempted to diversify beyond high net-worth clients and big corporations.
The launch of the Apple Card saw a positive outlook ahead with a much-heralded bespoke credit card interface with deep iPhone integration. Other well-received benefits, such as fewer fees and a daily cash-back accrual system, pointed towards a product equipped to succeed, but the partnership behind it would ultimately fail.
Apple primed for new Chase
Goldman Sachs is winding down its consumer activities, including high-profile collaborations with T-Mobile US on a co-branded credit card and a similar venture with General Motors. Ending the relationship with Apple is part of this overall strategy, but a settlement will be required as the agreement was set to run until 2028, at least.
They will find a willing negotiator in Apple who will want a clean break and not be hit with further damage in terms of its offerings and reputation.
Chase is better positioned as a new partner
Chase is thought to be well positioned as its new partner as they are already a key provider to the iPhone maker. The bank fulfils crucial roles in its finance operation, including holding cash assets as well as providing essential services to Apple.
There are other opportunities for mutual benefit between Apple and Chase. Still, the former’s financial services portfolio is so vast and wide-ranging that they won’t put their eggs in one basket.
Further developments will emerge as the relationship between Apple and Goldman Sachs is negotiated satisfactorily.
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