Apple Replaces Goldman Sachs with Chase for Apple Card
Recently, Apple announced that it would be transitioning its Apple Card service from Goldman Sachs to Chase. This marks the end of their partnership.
A report from the Wall Street Journal revealed that Apple described the relationship with Goldman Sachs as an “unhappy marriage” during conversations with multiple insiders.
An uncomfortable partnership
Apple had urged Goldman Sachs to approve almost all applicants for the Apple Card. This decision led to a notable increase in approvals for subprime borrowers, with over 30% of Apple Card balances belonging to individuals whose credit scores are considered below the prime threshold. This figure exceeds what many banks typically handle regarding subprime financing.
After Apple formally sought to end its relationship with Goldman Sachs, discussions with other potential partners began.
In pitching to one issuer, Apple characterized its partnership with Goldman Sachs as, well, an “unhappy marriage.” The report mentioned, “While both parties indicated a desire to continue working together, it’s not ideal to be with someone you don’t want to be with.”
Exploration into using private credit funds for balance underwriting was also discussed among Apple, Goldman Sachs, and other interested issuers.
One aspect considered by Apple, Goldman, and other card issuers was utilizing private credit funds for managing card balances. These funds have increasingly been employed in tailored loan transactions to help consumer lenders, but this kind of large-scale agreement would be a new venture.
Apple also consulted specialized investment banks to help source these funds and engaged with smaller fintech firms regarding partnerships with private credit companies.
Goldman reached out to private credit firms to gauge their interest, while Barclays interacted with KKR to explore potential deals.
Goldman had anticipated that Apple would choose a successor for the Apple Card by early March 2025. However, discussions did not proceed as planned, leading Goldman executives to feel that Apple wasn’t fully committed to the process.
During negotiations, it was said that Apple was simultaneously pursuing agreements with Chase, American Express, and Synchrony.
Synchrony, believing it had a chance at the business, began looking for ways to minimize costs related to the card transition.
However, by May 2025, Apple had informed Chase that they were the “preferred partner.” Interestingly, Apple also reached out to Capital One, hinting that an agreement was imminent, but still giving them a chance to get involved. Capital One, focused on acquiring Discover, continued discussions with Apple and Goldman in late June.
Ultimately, Apple decided to partner with JPMorgan Chase, which managed to secure certain safeguards should there be a spike in card delinquencies or performance issues post-agreement. Chase also negotiated terms to exit the partnership if necessary.
The shift from Goldman Sachs to Chase is expected to take place within the next couple of years, and Apple has promised to share more details as things develop.
