Billionaire Tim Cook, the CEO of Apple, was recently denied an Apple Card due to a mishap in the company’s venture with Goldman Sachs. This incident occurred because Cook’s account was flagged by credit bureaus, as high-profile individuals like him are often targeted by fraudsters. The credit bureaus’ red flags caused Goldman’s underwriting system to reject Cook. However, after the denial, Goldman overrode the decision, and Cook was eventually able to obtain the card.
The partnership between Apple and Goldman has faced challenges since the launch of the Apple Card in 2019. Reports suggest that Goldman is considering ending the partnership due to lower-than-expected profitability. When the partnership was formed, Goldman agreed to forgo collecting certain credit card fees, leading to a loss of revenue. This loss, along with increasing costs, has made it difficult for Goldman to sustain the partnership. Goldman has even attempted to transfer its Apple ties to American Express, but Apple holds the power to veto such a move.
Despite the turmoil, the Apple Card remains a joint venture between Apple and Goldman Sachs. However, the partnership has caused Goldman to suffer at least $1 billion in pre-tax losses. The two companies also had disagreements over the design of the card, with Goldman wanting to brand it with the logo of their failed consumer banking division, Marcus. Ultimately, only the Apple logo is visible on the front of the card, while Goldman Sachs and Mastercard logos are on the back.
Goldman Sachs has been actively seeking to end its partnership with Apple, but any potential deal involving American Express is unlikely due to Apple’s payment processing through Mastercard. Meanwhile, Apple has been expanding its financial services, including the recent launch of a “buy now, pay later” service in collaboration with Mastercard and Goldman Sachs.
In conclusion, the Apple Card and its partnership with Goldman Sachs have encountered various challenges. These include Cook’s initial rejection for the card, Goldman’s desire to exit the partnership, and disagreements over the card’s design. However, both companies remain engaged in the joint venture, while Apple continues to expand its financial services offerings.
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