According to people familiar with the matter, Amazon.com Inc. is approaching bids to replace JPMorgan Chase Co. as a seller on its popular co-branded credit card.
American Express Co. and Synchrony Financial are among the people who asked not to be identified discuss the negotiations, which have agreed not to be with American Express Co. Representatives for the lenders declined to comment, while a spokesperson for Amazon did not have immediate comment when reached via email on Tuesday.
According to some people familiar with Amazon, JPMorgan is willing to part with the portfolio of Amazon. In recent years, banks have loaded their cards with rich perks and made it harder for lenders to turn a profit, especially in the world of co-branded cards, where revenue is often shared with the merchant partner.
JPMorgan's current Amazon card comes with a lucrative set of rewards, including offering Prime members 5% cash back on purchases made on its website and within its subsidiary Whole Foods Market. That's helped it become the fastest-growing portfolio among the top 10 co-brand card programs in the U.S. according to a 2019 study by Packaged Facts.
JPMorgan could get a 15% premium on the portfolio which holds more than $15 billion in loans, said some people familiar with the matter. According to the packaged facts study, cardholders spend more than $50 billion a year on the card.
Amazon and JPMorgan issued the first card together in 2002 and their offerings have been operated for a long time on the Visa Inc. network.
It wouldn't be the first time Amazon worked with other credit card issuers. The retailer already offers a card with AmEx that is targeted at small-business owners. Synchrony also partnered with the firm on its Secure Labelling Card for long time and the two presented together a private card in 2019.
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