Goldman Sachs Group Inc, one of the world’s leading investment banks and financial services firms, is reportedly considering an exit from its partnership with Apple Inc, according to a report by Wall Street Journal. The collaboration between the two industry giants commenced in 2019 with the introduction of a virtual credit card. Now, as part of its strategic realignment, Goldman Sachs is engaging in discussions with American Express Co to potentially assume responsibility for Apple’s credit card and other joint ventures, insiders disclosed.
The partnership between Goldman Sachs and Apple, which played a pivotal role in thrusting the iPhone manufacturer into the realm of finance, has been the subject of much attention and success in recent years. However, the ongoing talks between Goldman Sachs and American Express suggest a potential shift in priorities.
While all parties involved declined to comment, industry experts believe this strategic move aligns with Apple’s ambition to reduce its dependence on external partners for financial services.
Goldman Sachs’ collaboration with Apple was aimed at diversifying revenue streams and capitalizing on the flourishing financial services sector. Last year, the tech giant generated approximately 20% of its total sales from this category, a significant increase compared to less than 10% a decade ago. This transition underscored Apple’s commitment to leveraging its loyal customer base and expanding its offerings beyond hardware and software products.
Potential agreement with American Express
In the ongoing negotiations between Goldman Sachs and American Express, both entities are exploring the possibility of transferring the Apple credit card and other joint services to the esteemed financial services provider. While discussions have been underway for several months, any potential transfer would necessitate Apple’s consent, emphasizing the tech giant’s involvement in the decision-making process.
A potential partnership with American Express not only showcases the ambitions of both companies but also signals a strategic realignment within the financial services industry. Furthermore, reports suggest that Goldman Sachs has also considered transferring its card partnership with General Motors Co. to American Express or another issuer. However, no imminent or guaranteed agreement has been reached thus far.
Shifting landscape for Goldman Sachs
These developments occur against the backdrop of a changing business landscape for Goldman Sachs. The prominent investment bank recently surrendered its long-held position as the world’s top mergers and acquisitions (M&A) advisor, slipping to second place for the first time in five years. In the first half of this year, Goldman Sachs claimed the second spot with an 18.8% market share, participating in M&A transactions totaling $237 billion. The last time the firm ranked second was in the first half of 2018.
The evolving dynamics in the M&A market have prompted Goldman Sachs to reassess its strategies and explore alternative avenues for growth.