Amber Neely
As Goldman Sachs prepares to offload its responsibilities to Apple, a new suitor has appeared. JPMorgan seems interested in taking the mantle — but with conditions.
It's been known for some time now that Goldman Sachs has wanted to end its relationship with Apple, with whispers of unrest first appearing in June 2023. However, it wasn't much of a surprise, as a report in January 2022 showed the investment bank lost $1.2 billion, chiefly because of the Apple Card.
As a result, Apple and Goldman Sachs have begun looking for a replacement partner who would take over duties as card issuer. The newest suitor to be added to the lineup is JPMorgan.
According to The Wall Street Journal, JPMorgan is very interested in the deal, but not without some concessions. Allegedly, JPMorgan wants to pay less than the full face value of Apple Card cardholders' $17 billion in outstanding balances.
The reason for the undercut is largely because Apple has subprime exposure — Apple Card apparently has a high percentate o users with lower-than-average credit scores and are considered default risks. This could make the deal costly for anyone to take on.
According to the report, JPMorgan also wants to do away with Apple's requirement that cardholders receive their statement at the beginning of the month. Allegedly, this practice caused Goldman Sachs to have customer service issues and exposed the bank to increased regulatory scrutiny.
Yet, there are plenty of reasons JPMorgan could want to take on the deal. JPMorgan is the world's largest bank by market capitalization and thus would likely have the resources to take on the Apple Card.
It already has ties to Apple, too. JPMorgan provides Chase customers with deals on Apple products. It also pays the company whenever its cardholders use Apple Pay.
For its part, Goldman Sachs is gearing up to exit the consumer finance sector. It is anticipated that Goldman Sachs will lose millions on the eventual sales.
JPMorgan isn't the only bank interested in the Apple Card. Goldman Sachs has talked to both Synchrony and American Express.
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9 Comments
They're also backing the savings accounts too.
Personally, I'm fortunate enough to be able to pay off the card every month. The 2-3% cash back rate doesn't make sense if you're paying 19% in interest.
I agree that having everyone on the same billing cycle isn’t a good idea. You end up with a boom of calls early in the month and not much the rest of the month which is a staffing nightmare. I am not a fan of Chase based on past experiences. Oh well, we will see.
Hopefully visa instead of Mastercard (and tap to pay while we are at it). The amount of places I go to that don’t accept anything except Visa is a hassle.