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Amazon Reportedly Fielding Credit Card Issuer Bids From American Express, Synchrony

By Eric Volkman - Jun 10, 2021 at 9:46AM

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The current issuer, JPMorgan Chase, apparently wants to step down from the job.

Two large and important credit card issuers, American Express (AXP 1.75%) and Synchrony Financial (SYF 0.08%), are apparently in the running to land one of the biggest co-branding deals on the scene: the Amazon (AMZN 2.07%) Visa-branded consumer credit card. 

According to a Bloomberg report that cited "people with knowledge of the matter," the retailer is fielding offers to become the card's new issuer.

No details of the two apparent bids were provided.

A stack of payment cards.

Image source: Getty Images.

The card's current issuer is JPMorgan Chase (JPM 1.66%), which according to the article's sources is willing to relinquish its position.

While no reasons were given, JPMorgan Chase's desire might be due to the many features and perks consumers now expect of major credit cards (which, in turn, derives from heavy competition among brands and issuers). These reduce profitability for issuers. Additionally, in co-branding deals, revenue is shared between issuer and brand.

If this is the reason (or one of them), JPMorgan Chase is at least minimally to blame -- the Amazon card comes with a raft of attractive extras, such as 5% cash back on all Amazon and Whole Foods purchases.

All told, according to figures from market research firm Packaged Facts cited in the article, Amazon credit card holders spend over $50 billion annually with that plastic. Some of the people interviewed by Bloomberg said the portfolio holds over $15 billion in loans.

None of the parties involved -- Amazon, JPMorgan Chase, American Express, or Synchrony -- have yet commented on the report. Both apparent suitors have collaborated previously with the retailer on cards: American Express with a small-business-focused product, and Synchrony with a private-label card.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. American Express is an advertising partner of The Ascent, a Motley Fool company. Synchrony Financial is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Visa. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

American Express Company Stock Quote
American Express Company
$165.84 (1.75%) $2.85
JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
$122.13 (1.66%) $1.99, Inc. Stock Quote, Inc.
$143.55 (2.07%) $2.91
Visa Inc. Stock Quote
Visa Inc.
$211.33 (0.12%) $0.25
Synchrony Financial Stock Quote
Synchrony Financial
$36.14 (0.08%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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