Two large and important credit card issuers, American Express (AXP 1.75%) and Synchrony Financial (SYF 4.54%), are apparently in the running to land one of the biggest co-branding deals on the scene: the Amazon (AMZN 0.64%) 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.
The card's current issuer is JPMorgan Chase (JPM 0.49%), 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.