Lessons As Apple and Goldman Sachs End Credit Card Partnership

Everything is easy when another person has done it, and if you try, you will learn some lessons. Yes, Goldman Sachs and Apple starting a consumer credit card product is not necessarily pioneering. There is no left inefficiency which both could have exploited to thrive in America. It is the same reason why MPESA clones failed in Nigeria and South Africa because both markets were more advanced than Kenya’s when MPESA started. So, anything MPESA offered Nigerians and South Africans was not better than the current products, for them to switch. So, mobile money failed in Nigeria and South Africa.

It is the same thing with USSD payment in the US. Who cares? What you have here is just great enough to bother.

So, for GS/Apple, I am not sure anyone with decent credit history cares about the design of the card or the logo on the card. Most care about the interest rates and the available credit limit. Apple/GS are babies in that space and cannot match Bank of America, Chase, etc. 

When this launched. I wrote that it was a waste of time for Apple and GS, because unlike when the consumer is giving money out (i.e. you are taking the risk), when you are receiving credits (i.e. borrowing), you focus on the best rates and limits, with limited interests on the “magical” design of the plastic. In other words, even if the plastic has a poor design but offers great rates and limits, Apple’s engineering ergonomics matters less, since no person waves cards as a fashionista product like the iPhone.

That is what happened here and it does not diminish the mission of fintechs which continues to unlock new vistas in the market. Those fintechs depend on bank sponsors to power them. What Apple and GS built was not a fintech product because GS itself is a bank joining a really late party, and its cost model cannot allow the business to thrive.

Tech giant Apple has announced its decision to discontinue its credit card partnership with Investment banking company, Goldman Sachs.

The tech giant recently sent a proposal to the Wall Street bank to exit the contract in the next 12 to 15 months. This exit would cover their entire consumer partnership, including the savings account rolled out this year.

Speaking on the end of its partnership with Goldman Sachs, Apple said,

“Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them.”

Comment on Feed

Comment 1: The Apple-Goldman Sachs credit card isn’t just another entry in the crowded market; it’s a game-changer in personal finance. Here’s why:
Brand Power: Apple’s expertise in user experience, combined with Goldman Sachs’ financial prowess, offers a unique, integrated service.
Data-Driven Insights: Leveraging data for personalized services, this partnership could redefine financial management.
Consumer Trends: This card meets evolving consumer demands for digital integration and ethical branding, especially among younger users.
Market Disruption: More than competing with banks, this venture could create a new niche in financial services.
Regulatory Expertise: Goldman Sachs’ experience ensures stability and compliance in this innovative venture.
In essence, this collaboration signifies a shift in financial services, prioritizing technology and user experience as key drivers of value.

My Response: “Apple’s expertise in user experience, combined with Goldman Sachs’ financial prowess, offers a unique, integrated service.” – The irony is that when you are borrowing money, the only user experience is interest rate and amount. Other things are marginal!

Register for Tekedia Mini-MBA (Feb 10 - May 3, 2025), and join Prof Ndubuisi Ekekwe and our global faculty; click here.