In a significant shift for its financial services, Apple is reportedly set to partner with JPMorgan Chase to replace Goldman Sachs as the backing institution for the Apple Card. This development follows a prolonged search by Goldman Sachs for an exit from the partnership due to substantial financial losses incurred from the credit card business, which has reportedly cost the bank billions over the past few years.
According to a report from the Wall Street Journal, which cited sources familiar with the situation, the upcoming arrangement with JPMorgan Chase is poised to culminate in an announcement soon. Goldman Sachs is expected to transfer approximately $20 billion in outstanding Apple Card balances to JPMorgan at a significant discount of over $1 billion. This unusual deal reflects the challenges Goldman has faced, as it’s more common in the industry for co-branded credit balances to sell at a premium rather than a discount.
The decision to transition to JPMorgan comes after Goldman Sachs had been actively seeking to relinquish its responsibilities tied to the Apple Card since at least late 2021. Other financial institutions, including American Express, Synchrony Financial, and Capital One, were previously considered potential candidates to take over the role but ultimately did not secure the deal.
In addition to backing the Apple Card, JPMorgan is also expected to oversee Apple-branded savings accounts. Current users of Apple’s savings platform may have the option to either remain with Goldman Sachs or transition to JPMorgan for their accounts. This new initiative is anticipated to bolster Apple’s financial ecosystem, which seamlessly integrates services into the Apple Wallet app.
Launched in 2019, the Apple Card has attracted consumers with its rewards system, offering 3% cash back on purchases made through Apple and select partners when utilizing Apple Pay, along with 2% cash back on other Apple Pay transactions. This user-friendly credit card experience has become a defining feature of Apple’s financial services strategy, especially in the U.S. market.
The shift to JPMorgan marks a pivotal moment as Apple continues to evolve its approach in the financial sector, further solidifying its commitment to integrating banking features within its technology ecosystem.
