Amazon is staying with JPMorgan Chase as issuer of its Prime credit card after considering a switch to American Express, CNBC reported Thursday (March 31).
American Express and Synchrony were in contention to fill the gap if JPMorgan was ditched while Mastercard maneuvered to displace Visa as the payments network, sources told the news outlet.
As a result of months of negotiations, Amazon’s decision allows JPMorgan Chase to issue the tech giant’s flagship rewards credit card.
Like Walmart, Amazon has a reputation for driving hard bargains with partners. Amazon succeeded in convincing potential credit card issuers to accept their terms.
Among them includes a provision to contribute a portion of the bank’s revenue when making loans and provide some of the interchange fees a bank would normally keep, sources said. It was not clear if Amazon was able to negotiate those terms with JPMorgan, the sources said.
A Chase spokeswoman declined to say whether those terms were agreed upon.
It’s no wonder JPMorgan’s competitors were seeking to replace the New York-based multinational banking and financial services holding company. The Amazon Prime Rewards card and its loyalty program has an estimated 150 million U.S. members, according to sources familiar with the negotiations.
“This was a once-in-a lifetime opportunity to penetrate Amazon and have a step change in your card business,” one source told the network. “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.”
This week, Yahoo Finance reported JPMorgan is offering a 1.5% interest rate for savings account customers at its digital bank in the United Kingdom.
The move is expected to start an interest rate war among financial institutions. The average rate for a saving account in the U.K. during the first quarter was 0.45%, according to Swanlowpark.
Sanoke Viswanathan, head of JPMorgan’s international consumer division, said that the bank plans to invest in the new U.K. operation and make itself a “serious force” there.