Apple getting into banking is a big deal. They launched the Apple Card with Goldman Sachs in 2019. It’s not just about selling iPhones and iPads anymore.
The Apple Card works smoothly with Apple products and gives perks like zero-interest loans for buying Apple stuff and cash back on purchases, which Apple fans love.
Even though Apple is looking to break up with Goldman Sachs, experts think it’s not because the Apple Card failed. It’s more about Goldman Sachs changing its focus away from regular people’s finances.
Goldman Sachs lost a lot of money from lending to regular folks, so Apple is looking for a new partner. They’re thinking about teaming up with companies like American Express or Synchrony Financial.
Goldman Sachs’ Change in Strategy
Goldman Sachs is making some big changes. They’re stepping back from trying to be a big player in regular people’s banking. They’re selling off GreenSky, a lending platform, even though it means losing money.
They’re also stopping their efforts to lend money to regular folks. This shift is a major move for the bank.
At the same time, Goldman is expected to announce good earnings for the first quarter, thanks to the stock market doing well and more deals happening.
Now, Goldman is focusing more on managing rich people’s money and helping with big investment deals. They want to make sure they’re making a good profit from what they invest, called “return on tangible common equity.”
Even their partnership with Apple, which was one of the few things left from their consumer banking, is up for reconsideration as Goldman rethinks its plans.
The Increasing Impact of Apple Pay
Apple Pay is becoming a big deal. Even as people talk about what’s next for the Apple Card, Apple Pay keeps getting more popular.
It started small in 2014, but now it’s handling a ton of payments, estimated at $600 billion to $700 billion.
More and more iPhone users are using it too, jumping from 10% in 2016 to 78% by March 2023. This shows how Apple is making more money from services, like Apple Pay, which now makes up 22% of all the money they bring in.
Apple wants to keep you using their stuff, so they’re pushing services like Apple Pay. It’s all part of their plan to grow and keep finding new ways to make money, especially in finance.
