Financial services giants Visa and American Express (Amex) are trying to grab a lucrative opportunity and become the new home for Apple Card. WSJ reports that Visa wants to pay about $100 million upfront to be the new payment network for Apple"s credit card.
Turning a few pages into history, Apple"s home-baked credit card was launched in 2019 at a special event alongside digital services such as Apple TV+, Apple News+, and Apple Arcade. The card was backed by Goldman Sachs, and Mastercard was used as its payment network.
Apple and Goldman Sachs are working to dissolve their partnership as the American bank wants to exit the personal banking sector. It was reported that Goldman Sachs suffered losses of $3 billion and wanted to hand over Apple Card operations to American Express.
The Cupertino giant will need an issuing bank and a payment network to operate the Apple Card. Not just American Express, JPMorgan Chase and Synchrony Financial are also in line to win the Apple Card from Goldman Sachs.
According to the report, American Express wants to become the issuer and payment network for Apple Card. Meanwhile, Mastercard, which currently operates the payment network, is also trying to keep its roots in place.
A highlight of Apple Card is that it doesn"t charge any annual, over-the-limit, foreign transaction, or late fees. It offers tools to reduce the interest amount and different percentages of daily cash when people make purchases.
Getting associated with Apple Card is undoubtedly a hard-to-miss chance; the credit card has over 12 million users in the US as of last year. However, it was reported that Apple and Goldman Sachs turned every stone to put the credit card in as many hands as possible.
Apple Card"s journey has included controversies as well. It was accused of gender discrimination after multiple user reports claimed that a higher credit limit was offered to male users. This included Apple co-founder Steve Wozniak, who got 10 times the credit limit as his wife.
Last year, the U.S. Consumer Financial Protection Bureau (CFPB) ordered Apple and Goldman Sachs to pay $89 million in fines over failing to address customer service breakdowns and misleading users about interest-free payment plans for Apple devices.
Source: The Wall Street Journal