JPMorgan Looks to Get Into Consumer Pants with New Apple Card Initiative (Rumor Has It)

Jamie Dimon to Cashier: Bitcoin is worthless, a fraud, and fools gold… 

(Proceeds to pull out his Apple Card)

Well everyone, it looks like the Apple Card is trading up. JPMorgan is reportedly in advanced talks to yoink the Apple Card portfolio away from Goldman Sachs, which has been handling the tech giant’s foray into credit since 2019. And if the whispers are true, we’re about to witness a prime case of financial Darwinism: the apex predator of banking feasting on a flailing iBanker’s fintech vanity project.

(Source: Giphy) 

In short, Goldman Sachs tried to dress up as a consumer bank for five-minutes… and now they’ve been desperate to get out of this relationship since at least last year. What started as a slick launch with Tim Cook and DJ-Sol awkwardly high-fiving on stage became a back-office migraine riddled with compliance headaches, mispriced risk, and an unfortunate reminder that Silicon Valley’s idea of disruption doesn’t always translate into good old-fashioned underwriting.

(Source: CNBC) 

Whereas, by the end of March, Goldman was lugging around $20.5 billion in total credit card loans, mostly thanks to Apple Card. The bigly problem? They were also front-loading reserves for potential losses (thanks to bean counting rules), making the unit a capital sinkhole right as the economy looked dicey. So, naturally, they’re bailing… and probably Venmo-requesting Apple for emotional damage. But alas, enter the man, the myth, the legend… Jamie Dimon. 

Jamie, who sits upon the Iron Throne of America’s biggest credit card issuer, is now circling Goldman’s sloppy seconds. While other suitors (think: Amex, Synchrony, and Barclays), tapped out somewhere along the way, Dimon’s crew stayed in the game. Now they’re the frontrunner to take over the $20B Apple portfolio and stitch it into their financial Frankenstein of co-branded card dominance. Meaning, if this deal closes, it’ll be a BFD. Why? Well because it’s a full-blown franchise expansion. Case in point: JPMorgan already prints cash off partnerships with Amazon, Southwest, and others. Adding Apple to that lineup is like signing LeBron in his prime… while your competition tries to convince you Dell is still cool. 

(Source: Reddit) 

But, but, but… wait, there’s more. Visa, not wanting to be left off the invite list, reportedly waved around a $100 million check to convince Apple to ditch Mastercard and join their network. So in the background of this issuer shuffle, we also have a potential payment civil war brewing. The vibes are very much: "you get a rake, we get a rake, everyone gets a rake." Of course, nothing’s final. These talks could quite literally implode, but Apple clearly wants a new daddy in the room. Especially considering it’s a win for both sides. 

For Apple, they’ll get scale, discipline, and a banker that doesn’t go full scorched-earth everytime J-Poww speaks. In turn, JPMorgan gets access to Apple’s loyal, high-income base… and a new beachhead to push more financial products down the line. Think: buy-now-pay-later, savings accounts, maybe even a Tim Cook-themed credit score if things really get weird.

(Source: Giphy) 

And Goldman? They’ll get a clean break and can go back to doing what they do best: quietly weaving themselves into more sh*t messes. For now, though… nothing is final, but make no mistake… given the upside of this deal, expect to hear some more details soon. Meaning, keep your eyes on this story and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Apple and Amazon as mentioned in the article.