Talks Accelerate as Goldman Backs Out
Apple and JPMorgan Chase are reportedly in advanced negotiations for JPMorgan to take over the Apple Card credit program, replacing Goldman Sachs as the issuing partner. According to The Wall Street Journal and CNBC, the discussions have accelerated significantly in recent months, while talks with other contenders such as American Express and Barclays have stalled.
Goldman Sachs, which originally launched the Apple Card with Apple in 2019, has been looking to exit the partnership due to concerns over profitability and exposure to consumer credit risk. The investment bank cited rising losses and regulatory scrutiny as key reasons behind the divestment strategy. JPMorgan, already the largest credit card issuer in the U.S. by purchase volume, now appears poised to absorb the Apple Card portfolio.
Deal Size and Challenges Under Negotiation
The Apple Card portfolio is estimated to include nearly $20 billion in outstanding balances. One of the reported sticking points in the negotiations has been the number of cardholders with subprime credit and the price JPMorgan is willing to pay for the portfolio. Despite these hurdles, both companies are reportedly close to finalizing terms.
Goldman’s exit from the partnership reflects broader strategic changes as the bank scales back its consumer finance ambitions. The move would also allow Apple to reset the foundation of its credit offering, especially after Goldman faced criticism for how it handled billing disputes and refunds within the Apple Card platform.
Potential Shake-Up in Payment Processing
Beyond the issuing bank, changes may also come to the card’s payment network. Mastercard currently processes Apple Card transactions, but Visa has reportedly made a $100 million bid to take over the role. This could add a second layer of transition if both issuing and processing partners are replaced simultaneously.
The final structure of the deal may impact user experience, risk management, and backend infrastructure for Apple Card holders. Apple executives may address the matter in more detail during their upcoming earnings call, where analysts are expected to seek clarity on the strategic implications of the potential switch.
Market Response and Strategic Implications
Shares of both Apple and JPMorgan were slightly lower in Tuesday trading following the news. While investors are closely watching how the deal unfolds, the partnership would mark a significant win for JPMorgan, further expanding its footprint in consumer finance. For Apple, aligning with a more experienced credit card issuer may enhance long-term service quality and reduce operational risks.
