Goldman Sachs somehow managed to lose money on its stake in the Apple Card business, and American Express has been mooted as a potential candidate to replace Apple’s card-issuing partner.

However, an in-depth article from The Information sheds light on the complexities of what switching banking partners would require… as well as some pretty good information about Apple.

Why save the best for last? The real highlight of The Information’s new article is that Apple CEO Tim Cook was actually unable to go through the Apple Card application process prior to the announcement.

Engineers at the Silicon Valley giant and Wall Street titan spent a few months before launch trying to figure out a solution to a problem that arose: Tim Cook couldn’t get an Apple Card approved.

Sure, Cook’s financials are relatively good, but he’s also a known fraud target. Ultimately, Goldman Sachs had to do a lot behind the scenes to get the Apple CEO an Apple Card.

Goldman’s underwriting system then rejected it, according to four people familiar with the matter. Goldman was finally able to make a one-time exception and Cook got his card.

The information also reports that the US-only Apple Card had around 10 million users as of early 2023. Although Goldman Sachs is reportedly looking to exit the consumer lending business, the investment bank could stick with those 10 million customers for a while.

The report casts doubt on the likelihood that American Express will save Goldman Sachs from the Apple Card:

Apple regards American Express as a brand with a similar prestige to Goldman, people familiar with the matter said. But neither American Express nor JPMorgan Chase, another potential partner, are focused on co-branded cards. Also, in terms of branding, they probably wouldn’t play second fiddle to a card partnership.

If not Amex or Chase, then who? The information quotes “people familiar with the company’s mindset and potential options” as reporting that a lesser-known name in banking could take over Goldman’s deal with Apple:

The tech giant could go with a bank big enough to take over Apple Card’s share of Goldman’s $17 billion credit card portfolio and related savings accounts, and do whatever it takes for regulatory reasons but otherwise remain invisible to customers, the people said. Apple could become more involved in aspects of the business Goldman now manages, such as underwriting decisions, fraud prevention, and customer service.

However things are going with the Apple Card, it doesn’t look like a fix will be found anytime soon. While the report emphasizes that Goldman Sachs is unlikely to decide to stick with Apple Card, it also points to the complexity of the transition, which could take a year and a half.

The full, paid report is available from The Information.

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