Multiple reports have claimed that Apple (NASDAQ:AAPL) has been talking to JP Morgan (NYSE:JPM), the largest bank in the US, to step in and takeover the popular Apple Card from current partner Goldman Sachs (NYSE:GS).
Apple partnered with Goldman to launch the Apple Card, which Apple described as the “most successful credit card launch ever.” Perhaps for Apple, but maybe not so much for Goldman Sachs.
Goldman has been in reverse for some time now from its much-ballyhooed foray into consumer Fintech. The thesis was that technology would enable Goldman to share its financial services expertise with the masses. This did not work out so well for Goldman, or at least they did not have the patience to see it through. It has been public knowledge that Goldman is anxious to get out of the agreement with Apple, and the bank is expected to take a big hit when it does.
If Apple moves the business to JPM, it will gain a prominent and highly respected partner. JPM CEO Jamie Dimon is widely viewed as the best bank CEO in the world. He has frequently commented on the fast-rising Fintech sector and the need for stodgy banks to buckle up and change. Adding Apple to its list of partners could be good for JPM, but expectations that any agreement would require some big changes.
WSJ.com reports that Apple Card’s 12 million users and $17 billion in outstanding balances will need to be transferred at a discount if JPM steps in for Goldman. It is also believed there are other features that may be disappeared if JPM partners with Apple. For example, Apple wanted balances due at the beginning of each month – not on a 4-week program. There are probably other items in the discussion as Apple may be required to fork over user data – a valuable commodity in the Fintech space. Will other financial products be pitched to Apple Card users? Probably. That consumer touchpoint is probably key to an agreement.
Previously CI reported that a plan was sent to Goldman to part ways within a year or more but no word on whether or not it was accepted. Could Apple purchase a bank and go it alone? Yep. But Apple appears to be focusing on its areas of expertise instead of veering into new ventures. Apple’s BNPL product is being exited. And don’t forget the mother of all tech projects. The Apple Car.