What the deal means for Goldman Sachs and its consumer push
Goldman Sachs has agreed to end its experiment in consumer lending that began with the launch of a co-branded card with Apple in 2019. The deal closes a chapter in which a major investment bank tried to build a large retail-facing business beyond its traditional strengths.
From innovation to exit
The 2019 partnership was framed as a blend of technology and finance: a sleek card tied to a popular device ecosystem, backed by a bank known for markets and corporate work. The aim was to reach everyday consumers, add a recurring fee and spend-based revenue stream, and broaden the firm’s relationship with new clients.
After several years, that experiment is coming to an end. The deal marks an important shift back toward areas where the bank has historically focused its efforts. Ending the collaboration signals that the move into mass consumer lending did not meet the strategic or financial targets the bank had hoped for.
Why consumer lending is hard for big banks
- Different business model: Consumer credit and card lending rely on high volume, tight credit controls and scale to turn modest per-account margins into meaningful profit.
- Operational complexity: Running a consumer-facing product requires extensive customer service, fraud prevention, and technology integration—areas that can strain a firm used to institutional clients.
- Competitive landscape: Cards and consumer banking face fierce competition from established card issuers, fintech startups, and large technology companies that have deep customer data and distribution advantages.
- Regulatory and reputational risk: Retail lending brings heightened regulatory scrutiny and direct exposure to customer complaints, which can be a different set of risks than wholesale banking.
Implications for the bank and for Apple
For the bank, the deal ends a costly and attention-grabbing experiment and allows management to reallocate resources. It also underscores how risky it can be to try to quickly scale a retail franchise without a clear path to profitability and a deep operating model for consumer services.
For the tech partner, an end to the current arrangement raises choices. That company can seek another financial partner, bring more financial services in-house, or pivot its strategy for how it monetizes payments and services on its platform. The device ecosystem remains a valuable channel for services, but the right operating partner matters.
Lessons for financial firms thinking about retail
- Scale matters: Success in consumer finance often comes down to acquiring large numbers of low-margin accounts and managing lifetime value carefully.
- Operational fit: A firm must build or buy the right customer-facing infrastructure, from apps to call centers, to compete long term.
- Partnership clarity: Clear roles, data sharing agreements and aligned incentives are essential when a bank pairs with a tech company.
- Focus on strengths: Some financial institutions will find it more efficient to deepen services where they already have advantage, while partnering selectively in retail areas.
What to watch next
Keep an eye on how the bank reallocates capital and talent after the deal, and whether it increases investment in areas like wealth management, markets or corporate banking. Watch how the tech company adjusts its payment and services strategy—whether that means finding a new banking partner, building more in-house capabilities, or changing the product mix.
The closure of this experiment is a reminder that bringing together finance and technology is promising but not straightforward. Execution, risk management and alignment between partners are as important as the idea itself.