JPMorgan Chase is set to become the new issuer of the Apple Card, taking over from Goldman Sachs. The transition process is anticipated to take approximately 24 months, with JPMorgan Chase also acquiring Goldman Sachs' existing Apple Card portfolio.
Transition Details
Apple has officially announced that JPMorgan Chase will assume operations for the Apple Card, replacing current issuer Goldman Sachs. This transition is projected to occur over approximately 24 months. During this period, existing Apple Card users will be able to continue utilizing their cards as usual. Mastercard will remain the payment network for the Apple Card. Further information regarding transition specifics will be provided to users as the process advances, and Apple has published an FAQ document detailing the change.
Background on the Partnership Shift
Goldman Sachs initially launched the Apple Card in 2019. Reports of Goldman Sachs' intent to conclude its partnership with Apple had circulated for over two years. Goldman Sachs initiated a strategic shift away from consumer finance in 2022, citing financial losses associated with its consumer banking ventures. Negotiations for the acquisition of the portfolio by JPMorgan Chase reportedly spanned approximately one year, with JPMorgan Chase emerging as the sole remaining prospective issuer after other potential partners, including American Express, Synchrony, and Barclays, withdrew from discussions.
Financial Aspects of the Deal
JPMorgan Chase will acquire approximately $20 billion in outstanding Apple Card balances from Goldman Sachs. This acquisition is reported to be at a discount exceeding $1 billion. Factors contributing to the reported discount and complexity of finding a buyer included a higher proportion of subprime and lower-credit borrowers within the portfolio and higher-than-average delinquency rates. Apple's original objective for its partnership with Goldman Sachs was to service a broad base of its iPhone users.
JPMorgan Chase's Future Role and Service Continuity
JPMorgan Chase, already the largest credit card issuer in the United States by purchase volume, will expand its presence in the credit card and retail banking sectors through this agreement. JPMorgan Chase also intends to offer an Apple savings account, integrating it into Apple's suite of financial services. Existing users holding Apple savings accounts with Goldman Sachs will not be automatically transferred and will need to decide whether to maintain their accounts with Goldman Sachs or establish new ones with Chase.
Key Apple Card features are expected to continue under the new issuer, including:
- Up to 3 percent unlimited Daily Cash back on all purchases.
- Tools for tracking spending and managing finances within Apple Wallet.
- Apple Card Family, enabling users to share an account within a Family Sharing group.
- Access to a high-yield Savings account.
- Apple Card Monthly Installments (ACMI), providing interest-free payment options for eligible Apple products.
Official Statements
Jennifer Bailey, Apple's vice president of Apple Pay and Apple Wallet, commented that Apple is proud of the Apple Card's impact and noted Chase's shared commitment to innovation. She expressed anticipation for continued collaboration. JPMorgan Chase and Goldman Sachs declined to comment on the transaction at the time of the initial reports.