JPMorgan Chase has reached an agreement with Apple to become the new issuer of the Apple Card, ending Goldman Sachs' six-year credit card partnership with Apple (JPMorgan Chase). American Express, Capital One, and Barclays were all rumoured contenders, but JPMorgan won the race. The deal hands JPMorgan an estimated $20 billion in credit card balances, bringing the bank's total US credit card portfolio to $255 billion. The transition is expected to take about two years, with consumer balances, payment history, credit limits, and Daily Cash rewards carrying over. Mastercard remains the payment network.
Goldman's Embedded Finance Bet Goes Wrong
Goldman Sachs partnered with Apple in 2019 to launch the Apple Card as part of its broader push into consumer banking. The card gained popularity, but Goldman was bleeding cash. The company reportedly lost $1.2 billion in 2022, and its platform solutions unit posted an $859 million net loss in 2024 (AppleInsider).
What This Means for Embedded Finance
The Apple Card saga offers a clear lesson for embedded finance in any market: partner selection matters. Goldman's losses stemmed largely from Apple Card's customer mix, with a 34% subprime rate that didn't fit the bank's risk appetite. Goldman is now handing over the portfolio at a $1 billion discount, reflecting higher-than-average delinquency rates. The lesson is that your partner's risk model needs to align with your customer base. JPMorgan, with its scale and existing credit card infrastructure, is likely better positioned to absorb this portfolio.
