What is the Apple Card and why is JPMorgan taking it over?

The Apple Card is Apple's co-branded credit card that was originally partnered with Goldman Sachs. JPMorgan Chase, the nation's largest credit card issuer, is reportedly taking over this partnership because they have the scale and infrastructure to better manage such a large credit portfolio, while Goldman Sachs is retreating from consumer lending.

What does 'co-branded credit card' mean?

A co-branded credit card is a partnership between a bank (that provides the credit) and another company (like Apple) that offers the card to its customers. The card typically features both companies' branding and offers rewards or benefits related to the partner company's products or services.

Why are tech companies choosing established banks over newer fintech companies?

Tech companies are increasingly favoring established banks because they offer greater stability, regulatory experience, and the capital needed to handle massive credit portfolios. Newer fintech companies may lack the scale and regulatory infrastructure needed for high-profile partnerships, especially during economic uncertainty.

What is a payment processor and why are they important in this trend?

Payment processors are companies that handle the technical infrastructure behind credit card transactions, moving money between banks, merchants, and customers. They're crucial because every co-branded card partnership needs reliable payment processing technology to function smoothly and securely.

How could this consolidation trend affect stock prices?

The consolidation toward established banking partners could benefit large banks, payment processors, and fintech infrastructure companies by increasing demand for their services. Companies with the scale and reliability to handle major partnerships may see increased business and potentially higher stock valuations.

17 handpicked stocks

Banking's New Guard: The Apple Card Consolidation

JPMorgan Chase's potential takeover of the Apple Card from Goldman Sachs signals a major shift in high-profile financial partnerships. This theme focuses on the large-scale banks and payment processors best positioned to benefit from the growing trend of tech giants seeking established, reliable partners for their financial products.

Han Tan | Market Analyst

Updated 2 days ago | Published at जुलाई 30