End of an era: Apple is shutting down its credit card partnership with Goldman Sachs 😳; Third time lucky? Robinhood launches in the UK 🇬🇧; Bitcoin ETF to unlock $70B in new demand 👀

FinTech is Eating the World, 30 October

Hey Everyone,

Happy Thursday! Today we’re looking at Apple shutting down its credit card partnership with Goldman Sachs (what happened & what’s next + some interesting bonus reads), Robinhood launching in the UK (third time lucky?, and why Google sold all its stake at Robinhood), and Bitcoin ETF that can unlock $70 billion in new demand (new analysis is very optimistic). Let’s jump straight into the fascinating stuff 🌶

End of an era: Apple is shutting down its credit card partnership with Goldman Sachs 😳

It was fun while it lasted… 🤷‍♂️ It’s over. Apple AAPL 0.00%↑ has decided to terminate its credit card partnership with Goldman Sachs GS 0.00%↑, delivering the final blow to the investment bank's ambitions in consumer lending, according to WSJ.

Let’s take a look at what happened, what this means, and what’s next.

More on this 👉 The tech giant proposed exiting the contract that covers their joint credit card and savings account in the next 12-15 months.

Launched in 2019, the Apple Card was intended to be a pillar of Goldman's shift towards consumer banking 💳

However, Goldman lost billions on its consumer business (a whopping $1.2 billion in 2022 alone 🤯) and indicated to Apple earlier this year that it aimed to sell the partnership.

Goldman has had talks with American Express AXP 0.00%↑ about taking over the card program, but AmEx expressed concerns over aspects like loss rates. Synchrony Financial SYF 0.00%↑, the largest US store card issuer, has also explored acquiring the portfolio.

✈️ THE TAKEAWAY

Looking ahead 👀 The unraveling signifies the end of Goldman's short-lived and unsuccessful foray into consumer lending after deciding to refocus on traditional corporate and high-net-worth clients. For Apple, this setback dents its services business, a growing focus as iPhone sales are slowing down. But the impact will be minimal here as the GS deal likely represented a small portion of services revenue. So Apple will be fine, they’re going to keep offering the Apple Card, but just with a new issuing partner. Hence, the most interesting question now is to see who will step in. Or maybe Apple will bring this in-house? 🤔 Zooming out, this divorce proves the importance of alignment of commercials between the Embedded and the Embedder, as many are discovering in real-time. More importantly, this serves as a perfect reminder that FinTech is hard but consumer FinTech is 10X harder.

ICYMI: Goldman Sachs regrets Apple Card, calls it a “mistake” and is trying to escape the deal ASAP 😳 [a closer look at the deal that was brilliant for Apple but not for GS + lots of bonus reads and deep dives ]