Is Amex a Good Fit for the Apple Card?

With Apple and Goldman Sachs calling it quits, rumors have been swirling around the financial and tech industries as to what Apple’s plans are for the revolutionary Apple Card.

Although some have speculated that this could spell the end for Apple’s digital-first credit card, it’s more likely that Apple is not only actively searching for a new partner but probably even has one or two potential candidates in mind.

Apple has already hinted that the Apple Card isn’t going anywhere, releasing a statement that it will “continue to innovate and deliver the best tools and services” for its customers. While that sounds like typical marketing-speak, the reality is that Apple’s partnership with Goldman will likely continue into early 2025, which gives the two companies plenty of ways to agree to an amicable divorce and for Apple to find somebody else willing to back the Apple Card.

This also assumes that Goldman accepts Apple’s proposal. While Goldman clearly wants out of the relationship, there’s no word yet on whether it considers the terms Apple put forward acceptable. If not, we could see more back-and-forth between the two before the end.

Meanwhile, Apple and Goldman have been exploring other partnerships for the Apple Card and its ten million-plus customers. It’s a popular card with customers, which gives other banks and financial companies an incentive to get on board, but the tougher question is whether they’ll be willing to play by Apple’s rules.

One possible partnership floated early on was American Express, following a report earlier this year that Goldman and Amex were in talks about the possibility of transitioning the Apple Card business over there. There’s not even an unofficial word on what stage those talks are at, but some sources suggest they’ve fizzled due to Amex’s unwillingness to “play second fiddle” to Apple.

Amex CEO Weighs In

American Express CEO Steve Squeri recently shed some light on how his company sees potential partnerships. While he didn’t mention Apple by name, it appears he hasn’t entirely ruled out the possibility of the Apple Card.

As reported by Payments Dive, Squeri was obliquely asked during an appearance at the Goldman Sachs US Financial Services Conference last week whether Amex would be open to an Apple Card partnership.

The question was posed by Goldman Sachs Analyst Ryan Nash, who noted “several articles that cited you [Amex] as a potential candidate to take over a card partnership from another large financial institution” and wanted to know about how Amex looks at co-branded partnerships and what it looks for in such arrangements.

Squeri’s comments were ambiguous at best, but he also made it clear that his company already has many such partnerships, but they have to “add value to both brands” and “create premium economics.”

When we look at co-brand partnerships – and we have over 50 co-brand partnerships – you’re really looking for one plus one equals three. Does it add value to both brands? And do you create premium economics? So, as we evaluate partnerships, that’s the lens that we use.

Steve Squeri, CEO of American Express

While it’s easy to see how Apple would check off at least some of those boxes, it’s still unclear what value Apple could bring to the American Express brand. After all, the Apple Card as it currently exists puts the Apple logo front-and-center, with the Goldman Sachs logo tucked away on the back.

Further, while the Apple Card also carries the Mastercard logo, that’s also uncharacteristically hidden away on the reverse of the card and shown in an atypically understated design. While that’s not as meaningful to Goldman — thousands of credit card issuers use the Mastercard network — the Amex network is unique to American Express. It’s hard to imagine Amex playing ball with having its brand out of the usual prominent position on the front of the card.

‘Premium’ Partnerships

As Squeri told Nash, “the premium card base is one of the biggest impediments” when it comes to co-branded partnerships “because sometimes the partner wants to reach into everybody, and that’s just not who we are.”

That’s clearly represented by Amex’s list of co-branded partnerships, which includes Aeroplan, British Airways, Delta Air Lines, Hilton, and Marriott Bonvoy, among others. It’s not hard to see how Apple would fit into that as a brand — however, it may not do so as a credit card.

In all of Amex’s current co-branded partnerships, it fully manages the cardholder experience. The brand partners merely offer perks and rewards that encourage their loyal customer base to opt for an Amex card.

However, while the Apple Card is considered a “co-branded” card by definition, it differs significantly from most other such cards as Apple takes a much more active role in the issuing and management of the card.

Amex’s existing partnerships would be much more akin to the Barclays Apple Rewards Visa Card that came before the Apple Card. It’s likely Amex would happily play ball with an arrangement like that, but an Amex card that provides Apple Rewards is not what Apple is looking for.

Nevertheless, that still doesn’t rule out the possibility that the two companies could find a way to make it work. Amex already provides one of the best Apple Wallet experiences of any third-party card. However, Apple would have to be willing to give up control and let Amex take the lead — and it may also be a hard sell to convince Amex to stick with a zero-fee structure while still offering significant cash-back rewards.

Meanwhile, Bloomberg’s Mark Gurman has suggested that JP Morgan Chase would be a good candidate to take over the Apple Card due to a strong relationship between the two companies and the ability to offer Apple some benefits that Amex can’t. However, Gurman doesn’t specify whether he’s heard anything official from his sources or if it’s merely educated speculation on his part. Other possible suitors recently named by analysts include Capital One, Bread, and Synchrony Financial, the latter of which is the largest issuer of store credit cards in the US and an original bidder for the Apple Card.