After a long relationship with JPMorgan, e-commerce giant Amazon is now looking for a new issuer for its co-branded credit card portfolio, reports Reuters, citing a person familiar with the matter.
It appears that the company has already sent out a ‘request for proposal’ for the portfolio, but required not to be identified, at least until the matter will be made public.
What does this mean for JPMorgan?
Despite getting very close to being ditched by Amazon, the bank will receive a 15% premium, which consists of more than $15 billion in credit card lending.
Among the favorites to replace JPMorgan are the likes of American Express Co and Synchrony Financial, according to most rumors. As for JPMorgan, this means, most likely, the end of an almost 20-year relationship, as the first joint card issued by them, operating on Visa, dates back from 2002.
One of the biggest co-brand programs in the U.S.
The current credit card offered by Amazon and JPMorgan comes with a very attractive set of rewards, including 5% cashback for Prime members on all purchases made on the site and at its subsidiary, Whole Foods Market. Such advantages helped the deal become one of the most attractive in the United States, in terms of co-branded credit cards, a 2019 study revealed.
“Though the massive co-brand portfolio would be a huge win for loan balances, the significant rewards associated with the program could be prohibitive, as evidenced by JPMorgan potentially being willing to walk away,” believes Keefe analyst Sanjay Sakhrani.
Finally, this wouldn’t be the first time when Amazon works with another credit card issuer, since they’re already offering an AmEx card for small-business owners, not to mention its private-label card, as well as its secured card, offered with Synchrony.