苹果目前的信用卡发行方是 As Goldman Sachs decides to withdraw from the consumer finance business, Apple needs to find a new bank to take over its credit card project with over 12 million users, which is a huge customer resource for any bank. Currently, Apple is still in negotiations with JPMorgan, and due to the high-risk customers involved in Apple's credit card project, JPMorgan hopes to take over at a more favorable price. The top management of JPMorgan is paying attention to the negotiations with Apple because technology companies like Apple are challenging the traditional role of banks, and banks must consider collaborating with these technology companies.
$JPMorgan (JPM.US)$ Currently in negotiations with Apple, planning to take over their credit card project. $Apple (AAPL.US)$ The credit card project.
On Tuesday, September 17th, Eastern Time, media reports indicated that the negotiations began earlier this year and have made some progress in recent weeks, but it may still take several months to reach a final agreement. It is not yet certain whether the transaction will be completed because key details such as price have not been finalized.
Apple's current credit card issuer is $Goldman Sachs (GS.US)$ However, Goldman Sachs decided to end its partnership with Apple in credit cards and savings accounts last year. Since then, Apple has been looking for new partners and has approached several companies, including Synchrony Financial and Capital One, to see if they are interested in taking over the credit card business. Goldman Sachs has also had discussions with Barclays about a similar partnership. $Synchrony Financial (SYF.US)$ However, Goldman Sachs decided to end its partnership with Apple in credit cards and savings accounts last year. Since then, Apple has been looking for new partners and has approached several companies, including Synchrony Financial and Capital One, to see if they are interested in taking over the credit card business. Goldman Sachs has also had discussions with Barclays about a similar partnership.$American Express (AXP.US)$However, Goldman Sachs decided to end its partnership with Apple in credit cards and savings accounts last year. Since then, Apple has been looking for new partners and has approached several companies, including Synchrony Financial and Capital One, to see if they are interested in taking over the credit card business. Goldman Sachs has also had discussions with Barclays about a similar partnership.
If JPMorgan and Apple reach an agreement, this will further strengthen the collaboration between one of the largest banks in the USA and one of the largest technology companies in the world. Currently, JPMorgan has taken measures to promote its collaboration with Apple. On one hand, they offer discounts to their customers when purchasing Apple products, in order to attract them to consume Apple products; on the other hand, when many JPMorgan credit card customers use Apple Pay, JPMorgan needs to pay a certain fee to Apple. Apple needs to find a new bank to take over its credit card business because Goldman Sachs has decided to no longer continue consumer financial business, and this credit card has over 12 million users.
JPMorgan hopes to purchase this business at a price lower than the outstanding balance of Apple's credit card project ($17 billion). Typically, the transfer price of a credit card business may be equal to or slightly higher than the total amount of loans, but if these accounts have high default rates or other issues, the price will be lower. Apple's credit card project contains some high-risk clients (subprime credit), and existing collaboration terms may bring significant costs to any bank taking over.
Allison Beer, the person in charge at JPMorgan, has been evaluating the Apple credit card project for the past few months, and JPMorgan CEO Jamie Dimon and other senior executives have also been informed of the progress of the negotiations. Dimon believes that technology companies are gradually becoming competitors to banks, so banks must remain flexible and consider collaborating with these technology companies. In a letter to shareholders this year, he wrote:
"The banking system is not static; there are emerging banks, mergers, successful venture startups, financial technology companies, and even Apple, which is actually operating like a bank."
JPMorgan also wants to modify some of the provisions in the credit card project, such as Apple's current requirement that all cardholders receive their statements at the beginning of each month. This unusual billing arrangement has caused Goldman Sachs to encounter customer service issues and has triggered regulatory scrutiny of its consumer lending business. Goldman Sachs has tried multiple times to convince Apple to change the statement date, and now Apple is willing to make this change for JPMorgan.
Goldman Sachs is facing multiple challenges as they plan to exit the consumer finance sector and try to reduce losses. Last week, Goldman Sachs revealed that it expects to incur approximately $0.4 billion in pre-tax losses when selling General Motors' credit card business and another small business. Barclays is negotiating to purchase General Motors' credit card business, but Barclays is not willing to pay the price Goldman Sachs originally expected, mainly because many borrowers have not repaid on time, leading to losses. Goldman Sachs may face even greater losses when selling the Apple credit card project.
In addition, the Consumer Financial Protection Bureau (CFPB) is investigating Goldman Sachs's credit card business. This investigation began in 2022, focusing on Goldman Sachs's credit card "account management practices," including how billing errors are handled and refunds are issued to cardholders. This investigation is almost entirely focused on Apple credit cards.
Editor/Rocky
