[Courtesy of Apple]
U.S. tech giant Apple Inc. is expected to face a setback in its efforts to expand into the financial world, as its partnership with Goldman Sachs is set to end next year.
The two companies had garnered industry interest when it developed the Apple savings account that offers an annual interest rate of 4.15 percent and the Apple credit card, which features “Buy Now Pay Later” payments.
According to the Wall Street Journal on Tuesday, Apple recently notified Goldman Sachs to end the credit card and savings account partnership within the next 12 to 15 months.
Sources, however, noted that the development was a result of Goldman Sachs’s push for retreat from the retail banking sector.
Until last year, Goldman Sachs said the partnership would continue into 2029. However, it changed its stance after the bank saw more than $1 billion in losses after the partnership with Apple.
Industry insiders noted that the losses were driven by a disproportionate imbalance of revenue between Apple and Goldman Sachs in the partnership.
Apple credit cards charge no fees other than installment interest, and Apple savings accounts offer higher interest compared with other commercial alternatives, all of which caused Goldman Sachs to suffer such losses, according to sources.
Apple, in the meantime, is expected to seek alternative partners.
Potential candidates include Synchrony Financial, the U.S. consumer financial services company, according to sources.
Synchrony Financial is one of the biggest credit-card partners for Amazon.com Inc. and PayPal Holdings Inc.
By Ahn Gab-seong and Han Yubin
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