Amazon is reportedly on the hunt for an issuer to take over its credit card portfolio, which JPMorgan Chase has been managing since 2002, per Bloomberg. The card portfolio contains more than $15 billion in loans and an estimated $50 billion in annual volume. Sources told the outlet Chase is prepared to step away from the portfolio, possibly because the card’s various perks—including 5% cash back on Amazon.com and Whole Foods purchases—may have posed some profitability challenges.
Synchrony and American Express are among the contenders—here’s what adding Amazon’s card business might mean for both players:
Whichever is the lucky pick will likely enjoy an uptick in spending volume as US consumers loosen their purse strings. With COVID-19 cases in the US at their lowest since March 2020, 67% of US consumers plan to increase spending on nonessentials in the second half of the year, according to CreditCards.com. Ecommerce will see the biggest gains, with 17.9% year-over-year growth expected in 2021, per eMarketer forecasts from Insider Intelligence, and Amazon will benefit handsomely—it’s already been on a growth tear over the last year. Despite the costs involved with managing such a large portfolio, issuers are likely drawn to Amazon’s major growth potential, especially as they look for more ways to speed up pandemic recovery.