Apple in Talks with Major Bank for Credit Card Program Takeover #

A major technology company is reportedly in discussions with one of the largest U.S. banks to take over its flagship credit card program. The talks are still in early stages, and key elements of the potential deal remain undecided.

The discussions could potentially falter over various matters in the coming months. The bank is reportedly seeking to acquire the credit card loan portfolio at a discount, given the elevated losses associated with the cards.

This development highlights the limited options available to the tech company after its previous banking partner decided to shift away from its retail banking strategy. Only a few card issuers in the U.S. have the scale and appetite to manage such a large credit card program.

The potential new partner is one of the country’s biggest credit card issuers by purchase volume. However, questions surrounding credit quality have made the portfolio less attractive to issuers, especially given concerns about a possible economic slowdown.

One of the key points of negotiation is whether certain features of the existing credit card program would be maintained. For instance, the current calendar-based billing system, which provides all customers with statements at the start of the month, is being reconsidered. While appealing to customers, this feature creates significant operational challenges for customer service.

The outcome of these negotiations could significantly impact the future of this prominent credit card program and potentially reshape the landscape of tech-finance partnerships in the consumer credit market.