The ongoing saga of the future of the Apple Card continues to unfold today. As per a report from The Wall Street Journal, it is disclosed that Apple is engaged in talks with JPMorgan Chase regarding taking over the Apple Card business from Goldman Sachs. This comes at a time when Goldman’s losses from its consumer business continue to mount, having recently surpassed the staggering sum of $6 billion.
In today’s report, it is explained that Apple has held discussions with several potential partners, including Capital One and Synchrony Financial, who could potentially take over the Apple Card. Additionally, Goldman Sachs itself also separately engaged in talks with American Express last year about transferring the partnership.
It is stated that the talks between Apple and JPMorgan Chase began earlier this year and have advanced significantly in recent weeks. However, a deal is still said to be months away, and key details such as the price are yet to be negotiated.
Currently, the Apple Card holds around $17 billion in outstanding balances among 12 million users. According to the report, JPMorgan is keen on paying less than the full face value of those balances. The people involved mentioned that the team at JPMorgan negotiating the deal aims to pay less than the total value of the roughly $17 billion in outstanding balances in the Apple credit-card program. Credit-card portfolios often sell at par or at a premium compared to the total loans, while accounts with high delinquency rates or certain other flaws might be sold at a loss. Apple has both subprime exposure and terms associated with its current program, which could pose challenges and potentially be costly for any issuer to take on.
As part of the negotiations, it is reported that JPMorgan has clearly expressed its desire to change key components of the Apple Card. This includes eliminating the current billing system, where all cardholders receive their statement at the beginning of the month. As previously reported, this has caused customer service and logistical difficulties for Goldman Sachs.
Although the report does not provide detailed information about any other potential changes, previous reports have emphasized that a new Apple Card partner would likely demand modifications to aspects such as data sharing.
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