【House of Pleasures (House of Tolerance)】

Apple dropped Goldman Sachs as its fintech partner,House of Pleasures (House of Tolerance) according to The Wall Street Journal. Are we surprised? Not in the least.

Before we dive into the telltale signs of their splintering relationship, let's discuss what we know so far. Citing "people briefed on the matter," WSJclaims that Apple wants to dissolve its alliance with the Wall Street bank in 12 to 15 months.

This disbandment spans across the duo's "entire consumer partnership," WSJ said, including the Apple Card and the Apple Savings Account.

Again, we're far from shocked. We always knew there was trouble in paradise.

3 signs that Apple's relationship with Goldman Sachs was fractured

After launching the Apple Savings Account in April, Apple lured users into its Apple Card lair after dangling an attractive 4.15% interest rate carrot. Before you can set up an account, you must get approved for an Apple Card first.

As someone who has an Apple Card and an Apple Savings Account, dealing with Goldman Sachs has been a headache. And as such, Apple may be cautious about continuing its dealings with Goldman Sachs.

1. Reports of Goldman Sachs' shaky customer service

In early June, WSJ reported that some customers had difficulties getting money out of their Apple Savings Account. They claimed that the money seemed to disappear for several weeks after transferring it out.

Fortunately, all of the victims in WSJ's report ended up getting their money back, but only after an abnormally long delay.

The Informationalso reported that Apple Savings Account members faced customer service issues. A gaggle of complaints triggered federal regulators, including the Consumer Finance Protection Bureau, to probe into the Apple Card. The complaints included slow processing that affects one's credit report, rejection of legitimate transactions, unprocessed refunds, and more.

According to The Information, Apple's role in the partnership involves designing the iPhone wallet app UI, creating a sleek, titanium card, and other slick features. Goldman, on the other hand, mainly handles customer service, underwriting, transactions, and other bank-like tasks, but apparently, some customers aren't thrilled with the financial institution's performance.

In a chuckle-worthy anecdote, even Apple CEO Tim Cook ran into some troubles with the firm. He's regularly impersonated, so his Apple Card application got denied, but Goldman Sachs stepped in to make a "one-off exception," so he got approved — eventually.

It's worth noting that plenty of customers have had positive experiences with the Apple-Goldman Sachs partnership. In fact, in 2021, Apple announced that Apple Card customers ranked Goldman Sachs and Apple Card "No. 1" in customer satisfaction among the mid-sized credit card market.

However, the reported issues that piled up in the media arguably sullied Goldman Sachs' reputation.

2. Goldman Sachs is bleeding money

According to a mid-October WSJ report, Apple isn't the only one who is unhappy in this union. "Some senior executives at Goldman want out of what remains of consumer lending—namely, the Apple credit card," WSJ said in part.

On top of that, Goldman revealed that its Platforms Solutions unit, a collection of businesses that includes Apple Card, lost $1.2 billion in just nine months.

"Inside the bank, partners complain that the consumer-lending business has been more trouble than it was worth, and they blame [CEO David Solomon] for Goldman's expansion in the space." WSJ said.

Consequently, Goldman Sachs has been itching to get rid of Apple, according to reports. This brings me to my next point.

3. Goldman Sachs reportedly wanted to dump Apple

In late June, WSJreported that Goldman Sachs had been chatting with American Express to end its partnership with Apple.

However, this wasn't a secret to Apple. The report revealed that the Cupertino-based tech giant was well aware that Goldman Sachs was aching to jump ship.

Now, it looks like Goldman Sachs' reported hunger for freedom has been satiated. As we mentioned at the outset, Apple is reportedly pulling out of its deal with Goldman Sachs.

This is a total 180-degree spin from just a year ago when Goldman Sachs announced an extension of the partnership through 2029.

It's not clear whether Apple has lined up an issuer to replace Goldman Sachs.

Goldman Sachs didn't immediately respond after a request for comment.