Tech News Briefing - December 5th

Key Topics

• Termination of Apple-Goldman Sachs Credit Card Partnership
• Impact on Apple and Goldman Sachs
• Challenges faced by the partnership
• Future implications for Apple and Goldman Sachs

Introduction

• Presenter: Alex Osola for The Wall Street Journal
• Topic: Apple and Goldman Sachs ending their credit card partnership

Overview of Apple Card

• Launched in 2019
• Features:
  • No fees
  • Daily cash rewards
  • Integration with iPhones for spending analysis
• Significance:
  • Apple's significant move into the payments industry
  • Initially viewed as a successful partnership for Goldman

Partnership Challenges

• Approval Terms: Apple wanted high approval rates, leading to potential higher loan losses.
• Billing and Payment Setup:
  • Uniform statement dates for all users
  • Led to customer service issues due to simultaneous statement dispatch
• Regulatory Scrutiny:
  • Probes by CFPB and the Federal Reserve into Goldman's credit card practices

Recent Developments

• November Proposal: Apple proposed exiting the partnership within 12-15 months.
• Scope of Exit: Includes both the credit card and joint savings account (launched recently).
• Goldman Sachs' Strategy Shift:
  • Announced a reorganization and pullback from consumer-focused ambitions in October
  • Planning to offload the General Motors credit card

Implications for Apple and Consumers

• Apple needs a new bank or financial institution willing to manage the credit card program.
• Current card operations continue under Goldman until transition.
• Apple may need to adjust terms to attract a new partner.

Conclusion

• Apple and Goldman Sachs' partnership was initially groundbreaking but faced significant challenges.
• Both companies are now looking at strategic shifts in their operations and partnerships.

Reported by Anna Maria Andriotis.

Production Credits

• Producer: Julie Chang
• Supervising Producer: Catherine Millsop
• Host: Alex Osola

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