JPMorgan Takes Over Apple Card, Cementing Grip on US Credit Market
Deal marks Goldman Sachs' official retreat from consumer lending, transferring a $20 billion portfolio to its Wall Street rival after a costly foray into main street banking.
JPMorgan Chase has finalized a deal to become the new issuer of the Apple Card, taking over a more than $20 billion portfolio from Goldman Sachs and ending a troubled chapter in Goldman's experiment with consumer banking.
The agreement, first reported by The Wall Street Journal and confirmed in subsequent announcements, marks a strategic victory for JPMorgan, already the largest U.S. credit card issuer. For Goldman Sachs, it represents a definitive and costly retreat from its ambitions to build a Main Street financial powerhouse.
Shares of both financial giants dipped in recent trading, with JPMorgan Chase (NYSE: JPM) falling approximately 2.3% to $326.99 and Goldman Sachs (NYSE: GS) declining about 1.5% to $941.02, amidst a broader market downturn. The move solidifies JPMorgan's formidable position in the payments ecosystem, adding a significant, high-profile co-brand relationship to its portfolio.
Goldman's Costly Exit
The handover concludes a multi-year struggle for Goldman Sachs, which launched the Apple Card in 2019 as the flagship product of its consumer division, Marcus. The partnership, while initially seen as a coup for its access to Apple's loyal customer base, quickly became a financial drain. The investment bank reportedly faced higher-than-expected loan losses and steep operational costs associated with servicing millions of cardholders, a business far removed from its traditional focus on institutional clients and high-net-worth individuals.
Goldman is effectively paying to exit the partnership, with reports indicating it will offload the loan balances to JPMorgan at a discount exceeding $1 billion. This marks the final step in unwinding a consumer strategy that, despite attracting billions in deposits, failed to achieve profitability and drew scrutiny from regulators.
A Strategic Win for JPMorgan
For JPMorgan, the deal is a natural fit that leverages its immense scale and deep experience in consumer credit. The bank, which boasts a market capitalization of over $920 billion, already manages a colossal credit card business with tens of millions of customers. Absorbing the Apple Card portfolio will further cement its dominance and deepen its relationship with one of the world's most valuable technology companies.
"This is a home run for JPMorgan," one analyst noted. "They have the infrastructure, the risk management framework, and the balance sheet to make this partnership profitable in a way Goldman couldn't. It gives them a direct line to a younger, tech-savvy demographic that is highly valuable."
According to its official corporate profile, JPMorgan's existing consumer and community banking division serves millions of customers nationwide, an infrastructure that will be critical in smoothly transitioning the Apple Card accounts.
The Path Forward
The transition is expected to be a complex, multi-year process, slated to take approximately two years to complete. Apple has assured customers that they can continue to use their cards without interruption during this period. Mastercard will remain the payment network for the card.
As part of the new arrangement, JPMorgan is also expected to launch a new high-yield savings account for Apple Card holders, a feature that was popular under Goldman's tenure. Existing customers of the Apple Savings account with Goldman Sachs will have the option to either keep their accounts with Goldman or migrate to the new JPMorgan-backed offering when it becomes available.
The deal underscores the immense challenges and capital requirements needed to compete at scale in the U.S. consumer finance market. While fintechs and new entrants have sought to disrupt the space, the Apple Card saga demonstrates the enduring power and structural advantages held by incumbent banking giants like JPMorgan Chase.