WSJ: Apple Card could switch from Goldman Sachs to Chase and change ‘key’ features

The ongoing saga of the future of the Apple Card continues today. According to a report from The Wall Street Journal, Apple is in talks with JPMorgan Chase about taking over the Apple Card business from Goldman Sachs.

This comes as Goldman’s losses from its consumer business continue to mount, recently surpassing $6 billion.

Today’s report explains that Apple has held talks with several potential partners, including Capital One and Synchrony Financial, who could take over Apple Card. Goldman Sachs also separately spoke with American Express about transferring the partnership last year.

Talks between Apple and JPMorgan Chase are said to have started earlier this year “and half advanced in recent weeks.” A deal, however, could still be “months away,” and “key details including the price are still to be negotiated.”

Currently, Apple Card has around $17 billion in outstanding balances across 12 million users. JPMorgan hopes to pay “less than the full face value” of those balances, according to today’s report:

The team at JPMorgan negotiating the deal wants to pay less than the full face value of the roughly $17 billion in outstanding balances in the Apple credit-card program, the people said. Credit-card portfolios often sell at par or for a premium to the total loans, while accounts that have high delinquencies or some other flaw can sell at a loss. 

Apple has both subprime exposure and terms associated with its current program that could be costly to take on for any issuer.

As part of the talks, JPMorgan has also reportedly made clear that it wants to change “key components” of the Apple Card. This includes eliminating the current billing system, where all cardholders receive their statement at the beginning of the month. As previously reported, this has led to customer service and logistical challenges for Goldman Sachs.

Today’s report doesn’t detail any other potential changes. However, previous reports have also emphasized that a new Apple Card partner would likely demand changes to things like data sharing.

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