Apple Card: The reasons for the end with Goldman Sachs Apfelpatient

The Apple Card is undergoing a fundamental transformation. Apple has officially confirmed that the credit card will be taken over by JP Morgan Chase. This ends the partnership with Goldman Sachs, which was considered an ambitious prestige project from the outset. A detailed report by the Wall Street Journal now reveals why Apple internally described the collaboration as an "unhappy marriage" and why the separation was ultimately inevitable.

When the Apple Card was launched, it was intended to simplify and reimagine the credit card market. Clear user guidance, transparent fees, and close integration with the Apple ecosystem were key. However, structural problems developed behind the scenes. Conversations with around 20 people familiar with the matter reveal that the interests of Apple and Goldman Sachs increasingly diverged (via WSJ).

High approval rates and increasing risk

Apple focused early on ensuring that as many applicants as possible received an Apple Card. Goldman Sachs was pressured to approve almost all applications. This resulted in a disproportionately high number of customers with poor credit being accepted. More than 30 percent of outstanding Apple Card balances were owed to borrowers whose credit rating fell below what most banks consider first-class.

This proportion was even higher than at many institutions that focus specifically on subprime loans. For Goldman Sachs, this meant an increased risk of default and growing regulatory pressure.

The split between Apple and Goldman Sachs

After Apple officially proposed ending their partnership with Goldman Sachs, Apple simultaneously began discussions with other card issuers. In internal presentations, Apple described the relationship with Goldman Sachs as an unhappy marriage. While both sides were willing to formally remain together, neither wanted to be tied to a partner who didn't truly want the relationship.

This assessment illustrates how strained the relationship already was at that time.

Considerations regarding private loan funds

One of the options discussed was to use a private credit fund to take over the existing Apple Card balances. Such funds are increasingly used on Wall Street for complex and customized financing. While they have supported consumer lenders before, a deal of this scale and complexity would have been unprecedented.

Apple tasked a boutique investment bank with finding a suitable fund and also discussed a potential structure with a private lending partner with a smaller fintech company. Simultaneously, bankers from Goldman Sachs contacted private lending firms to gauge their interest. Barclays, which was considering making its own bid, approached KKR to secure support for a potential transaction.

Delayed decisions and parallel negotiations

Goldman Sachs anticipated that Apple would decide by early March 2025 which partner would take over the Apple Card. Direct negotiations between Goldman and the new issuer were then expected to begin. However, this timeline was never met. Goldman executives felt that Apple was not taking all the necessary steps to move the process forward.

Meanwhile, Apple was working on three potential contracts simultaneously, with JP Morgan Chase, American Express, and Synchrony. Synchrony, in particular, seemed confident of winning the contract and had already begun examining how card transactions could be processed as cost-effectively as possible.

The decision for JP Morgan Chase

In May 2025, Apple finally informed JP Morgan Chase that the institution was its preferred partner. At the same time, Apple also contacted Capital One, indicating that a deal was imminent but that there was one last opportunity to invest. While Capital One cited its focus on the planned acquisition of Discover, it continued discussions with Apple and Goldman Sachs until June.

Ultimately, the decision went in favor of JP Morgan Chase. The bank secured extensive safeguards in case loan defaults increased sharply after the contract was signed or the performance of the Apple Card deteriorated. Chase also negotiated the right to withdraw from the deal even before the final contract was signed.

Apple Card: When technology meets banking

The story of the Apple Card illustrates how challenging collaboration between a technology company and a traditional investment bank can be. Differing risk perceptions, strategic goals, and operational expectations increasingly strained the partnership between Apple and Goldman Sachs. With the planned transition to JP Morgan Chase, expected to take place over the next two years, a new phase is beginning for the Apple Card. Apple plans to release further details as the transition progresses. (Image: Shutterstock / Primakov)

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