Apple Card
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The writing has been on the wall for months. After endless speculation about Goldman Sachs desperate to exit its consumer lending experiment, a new player has finally stepped up to the plate. JP Morgan has reportedly cut a deal to acquire the credit card programme, ending a turbulent chapter for Goldman that never quite found its footing.

Goldman's Expensive Retreat from Consumer Finance

Goldman initially pitched a bold vision. They believed their mastery of global markets would translate effortlessly to the mass affluent market through slick tech. It didn't work. The strategy faltered almost immediately, forcing the banking giant to initiate a full-scale retreat back to its traditional wheelhouse operations.

Getting out won't be cheap, either. As part of the agreement to offload the business, Goldman is set to take a painful £790 million ($1 billion) haircut on its outstanding credit balances. It is a massive financial blow that highlights just how difficult this venture became.

Why High Delinquency Rates Stalled the Deal

For a while, it looked like no one wanted to touch this portfolio. 9to5Mac reported recently that a deal was proving incredibly difficult to close, largely due to the credit profile of the customers involved. Too many subprime users were simply weighing down the books.

The numbers are stark. User delinquency rates were pegged at 4%, sitting uncomfortably higher than the industry average of 3.05%. While the Apple Card offers users generous perks like cash back and high-yield savings, those features mean little if the underlying [credit card] business can't turn a profit.​

Can Jamie Dimon Turn the Ship Around?

JP Morgan is entering this arrangement with eyes wide open. As the largest bank in the US by assets, they are already the dominant force in the country's credit card sector, issuing more Visa and Mastercard products than anyone else.

Where Goldman stumbled, JP Morgan might actually thrive. They are arguably better equipped to handle complex [digital services] at this scale. The bank is already rolling out JPMCoin, a bank-issued stablecoin designed to slash the cost of payments and transfers.​

Then there is the leadership factor. Jamie Dimon, widely considered the most respected CEO in banking, calls the shots here. He once dismissed crypto but now embraces it as transformative tech, suggesting he sees value where others see risk.

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