It isn’t every day — or every year, even — that a high-profile credit card business comes up for grabs. Yet that’s the situation now with Apple‘s (NASDAQ: AAPL) namesake Apple Card. The tech giant is jettisoning the product’s current issuer, a change that also might result in a switch of the network operator facilitating the card’s transactions.
The stakes in this battle could be high. A great many Apple Card holders are also Apple device owners, meaning that at first blush, anyway, they comprise a relatively affluent crowd. There’s also the renown and prestige of linking up with a top name in the consumer tech world.
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With its usual hype and fanfare, Apple launched Apple Card in early 2019. The company loves being considered an envelope-pushing innovator, so it touted its rectangle as a “new kind of credit card” that could be used and managed entirely through the Wallet app packed into its devices.
The issuer behind the card was, and remains for now, Goldman Sachs (NYSE: GS). At the time Goldman was pushing hard into consumer finance, most notably starting a next-generation bank called Marcus. The company never effectively made the swing from its wheelhouse of investment banking to bread-and-butter financial services, and it began transitioning out of Marcus in 2022.
Apple surely saw the writing on the wall, and in November 2023 it proposed that Goldman exit from the partnership, according to a contemporary Wall Street Journal article. Several months later, the Journal reported that U.S. banking king JPMorgan Chase was in talks with Apple to be the card’s new issuer.
The financial newspaper later wrote that others, including Capital One and Synchrony Financial, were also in discussions with the tech company to be the new issuer.
For the most part in the credit card world, the entities that issue the credit and the ones that process the transactions are separate. Apple Card’s network operator since inception has been Mastercard.
If the issuer can be replaced, then so can the network operator. No doubt with that principal in mind, Mastercard’s archrival, Visa, has offered around $100 million to Apple to be the facilitator of Apple Card transactions — again according to Journal reporting, in this case from early April of this year.
American Express also seems to be in the running for Apple’s business. The interesting wrinkle is that, unlike pure processors Visa and Mastercard, AmEx also acts as the issuer of its credit. If Apple decides to go this route for the card, then, it would likely have a single entity doing both jobs.
