Apple CEO Tim Cook introduced the Apple Card at a launch event at Apple’s headquarters in Cupertino, California on March 25, 2019.
Noah Berger | AFP | Getty Images
apple Under discussion JPMorgan Chase As the bank takes over the tech giant’s flagship credit card program Goldman SachsA person familiar with the negotiations revealed this.
The talks are still in their early stages, and key elements of a deal, such as the price or whether JPMorgan will continue certain features of the Apple Card, have not yet been decided, according to the people, who spoke on condition of anonymity to discuss the nature of the potential deal.Talks could break down over those and other issues in the coming months, the people said.
But the move shows how limited Apple’s options were when Goldman Sachs decided to pivot from its ill-fated consumer-banking strategy: Only a few U.S. card issuers had the scale and appetite to take over the Apple Card program, which has forced Goldman into losses and regulatory scrutiny.
JPMorgan is the nation’s largest credit card issuer by purchase value, according to the Nilson Report, an industry newsletter.
Goldman is asking Apple to repay about $17 billion in loans below face value because the card is suffering mounting losses, according to people familiar with the matter. Sources close to Goldman argue that Apple Card has higher than average delinquencies and defaults because the customers are new accounts. Those losses were supposed to mitigate over time.
But questions about credit quality are making the portfolio less attractive to issuers amid concerns the U.S. economy may be heading for a slowdown.
JPMorgan is also considering eliminating a key feature of the Apple Card called calendar-based billing, which means all customers get statements at the beginning of the month, rather than staggering them throughout the month, according to people familiar with the matter. While the feature is appealing to customers, it means service reps are inundated with calls at the same times every month.
Apple and JPMorgan declined to comment on the talks, which were earlier reported by The Wall Street Journal.
