What: Apple’s card program has not been working as well as expected for Goldman Sachs.

Why it is important: Department stores should not discard their traditional credit card partnerships yet

Apple is ending its credit-card partnership with Goldman Sachs, marking a significant retreat for the Wall Street bank from consumer lending. The tech giant has proposed to exit the contract, which includes the credit card launched in 2019 and a savings account introduced this year, within the next 12 to 15 months. This move signifies a reversal from their extension agreement through 2029, intended to be a key part of Goldman's consumer market strategy.

Goldman Sachs, having suffered substantial losses in its consumer operation, had already expressed interest in offloading the partnership earlier this year. Potential successors for the program include American Express and Synchrony Financial, although Amex has shown concerns about certain aspects of the program, and discussions may not be ongoing.

For Apple, this development is a setback in its services business, which has become more vital as iPhone sales slow down. Goldman Sachs, on the other hand, is refocusing on its core clients in corporate and investment sectors after this and other consumer-lending setbacks, including ending another credit-card partnership with General Motors and selling off its personal loans portfolio.

The partnership had a rocky beginning, with disagreements over cardholder approval rates leading to higher loan losses for Goldman and operational challenges. Goldman Sachs is also facing regulatory scrutiny over its credit card practices, leading to internal shifts to address these issues.

Apple pulls plug on Goldman credit-card partnership