Apple Card switches to JPMorgan Chase as new issuer. Goldman Sachs is exiting the business after years of partnership.
Apple and JPMorgan Chase have officially announced the takeover of the Apple Card business, as Handelsblatt reports.
It includes around $20 billion (16 billion Swiss francs) in outstanding balances. Goldman Sachs is losing its entry into the consumer business.
The Apple Card launched in 2019 as an innovative credit card with iPhone integration. It offered daily cashback rewards and no annual fees.
Reasons for Goldman’s exit
Goldman Sachs recognized high losses due to credit defaults on the card. According to the Handelsblatt, provisions amounted to $2.48 billion.
The board was already planning a realignment of the private customer business. According to “heise.de”, Apple was looking for a new partner for a long time after the break with Goldman.
Previous reports suggested negotiations with several banks. JPMorgan ultimately stepped in as the strongest candidate.
Financial strain on JPMorgan
JPMorgan expects to build loan loss provisions of $2.2 billion. In addition, $38 million will be incurred for transaction fees, reports “Reuters”.
Nevertheless, the deal strengthens Chase’s position in the US credit card market. It is said that the purchase price is significantly below the nominal value of the assets taken over.
JPMorgan takes over the entire platform including all balances and contracts.
Impact on Apple Card users
Regulatory approvals from authorities such as the US Fed are still pending. According to “finanznachrichten.de”, the transition will take around 24 months to complete.
Mastercard remains involved as a payment network. Over 12 million card users are directly affected by the change.
Existing cards will initially continue to function unchanged, emphasizes “Apfelpage”. The change should go smoothly without interruptions for customers.
