Apple CEO Tim Cook demonstrates the Apple Card during a launch event at Apple headquarters on March 25, 2019 in Cupertino, California.
Noah Berger | AFP | Getty Images
JPMorgan Chase reached an agreement to take over the Apple credit card from its original issuer, Goldman Sachsaccording to a person with knowledge of the transaction.
This agreement, which will be announced shortly after a year of negotiations between the parties, means that the giant of credit cards and retail banking in general will grow further. JPMorgan will take over about $20 billion in card lending from Goldman, which began moving away from consumer credit in 2022.
The deal, which further aligns JPMorgan with a dominant technology player, strengthens the bank’s reputation as a leader in American finance. Even before this deal, it was already the largest credit card issuer in the country in terms of purchase volume.
For Goldman, offloading the Apple Card business helps it weather a difficult chapter for CEO David Solomon. Goldman entered the credit card business with great fanfare in 2019, beating out other issuers for the Apple Card.
In July, CNBC reported that negotiations between JPMorgan and Apple had progressed, with JPMorgan the last bank standing after other interested issuers, including American Express, Synchrony and Barclays, exited.
At the time, people with knowledge of the matter said JPMorgan would only take over Apple’s card portfolio if Goldman and Apple were willing to make concessions.
It appears JPMorgan has succeeded on at least one front: It is taking over the Apple Card portfolio at a discount of more than $1 billion, according to the person familiar with the matter, who spoke on condition of anonymity about confidential details of the deal.
The portfolio contains more subprime and lower-credit borrowers than JPMorgan would typically serve, people with knowledge of the industry told CNBC. Apple wanted Goldman to serve as many iPhone users as possible, the sources said.
JPMorgan also plans to offer an Apple savings account as part of a suite of financial services offered by the tech giant.
JPMorgan and Goldman declined to comment. The Wall Street Journal was first to report on the deal.