Amazon Renews Prime Credit Card Deal With JPMorgan Chase

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Amazon Inc (NASDAQ:AMZN) has decided to renew its Prime Rewards card agreement with JPMorgan Chase & Co (NYSE:JPM). For almost two decades, the e-commerce giant had trusted the bank to issue the card, and the announcement quelled any hopes that other banking giants could coup the deal.

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As reported by CNBC, in mid-2021, Amazon had opened a bid to replace JPMorgan as the issuer and considered the likes of American Express Company (NYSE:AXP) and Synchrony Financial (NYSE:SYF). Mastercard Inc (NYSE:MA) had also expected to dethrone Visa Inc (NYSE:V) as the company’s payments network.

With an estimated 150 million members in the U.S., the Amazon Prime Rewards card is one of the most craved co-brand deals.

One anonymous source told CNBC, “This was a once-in-a lifetime opportunity to penetrate Amazon and have a step-change in your card business. If Chase were to lose it, it would be the shot heard around the payments world. Any winner would gain instant credibility and a new growth story for Wall Street.”

Sources also say Chase holds a total of $20 billion worth in Prime customers loans, a portfolio the bank threatened to sell and walk away with amid the card’s negotiations.

Long Relationship

Contracts for co-branded credit cards with big businesses such as Amazon, Costco Wholesale Corporation (NASDAQ:COST) and American Airlines Group Inc (NASDAQ:AAL) are some of the hottest deals in finance at present.

Banks secure plenty of loyal customers who use these cards to spend billions of dollars every year. Meanwhile, the payment method offers cashback promotions, discounts, and points people can later redeem in products or services.

“The biggest pacts can make up a disproportionate share of an issuer’s business; American Express lost 10% of its cards in circulation when Citigroup won the bid for Costco’s card in 2015,” CNBC reports.

Amazon is set to continue with JPMorgan and Visa as its payments network. Bezos’ company first came in contact with Bank One, a lender based in Chicago with Jamie Dimon as CEO at the time.

The bank signed up the then-emerging e-commerce website to a card deal, and the relationship with JPMorgan was established when the latter acquired Bank One two years later.