Visa, Mastercard, and American Express seem to be engaged in an intense competition to secure a partnership with Apple for its credit card business. Visa has made the most aggressive move yet, offering Apple an upfront payment of approximately $100 million, reports Reuters. This financial incentive is typically reserved for the largest co-branded credit card programs, and comes at a time when Cisa is looking to expand its footprint in the lucrative digital payments sector.
Visa’s bid is driven by the growth of Apple Card in the global fintech landscape. Since its launch in 2019, the Apple Card has gained over 12 million users in the US and accumulated approximately $20 billion in outstanding balances. The card is integrated with the Apple ecosystem, offering an efficient user experience through the Wallet app, cashback rewards, and security features as well. If successful, the $100 million offer would grant Visa access to a vast consumer base, as well as further strengthen Visa’s foothold in co-branded credit card partnerships and reinforce its presence in the growing ecosystem of digital and mobile-first payments.
Despite Visa’s push, Mastercard is not willing to give up its role without a fight. The company, which has served as the Apple Card’s payment network since its inception, is reportedly working hard to maintain its position. In this vein, Mastercard has been exploring potential integrations with Apple’s financial ecosystem, including its Finicity platform, which specializes in open banking and financial data aggregation. By leveraging its existing relationship with Apple and enhancing its technological capabilities, Mastercard aims to convince Apple that it remains the ideal partner for processing Apple Card transactions.
Mastercard’s desire to retain the Apple Card business is understandable, given the immense value of the partnership. Apple’s growing influence in financial services means that losing this collaboration would not only impact Mastercard’s transaction volume but could also weaken its position against competitors in the broader payments market.
And to add to this, American Express is also actively competing for the Apple Card business but is taking a different approach from Visa and Mastercard. Instead of merely seeking to become the card’s payment network, Amex is reportedly pushing to take over both roles—acting as both the issuing bank and the network provider. American Express has long been known for its premium card offerings and exclusive rewards programs, which could appeal to Apple as it seeks to refine and enhance the Apple Card’s benefits. However, Amex’s traditionally high merchant fees may pose a challenge in negotiations, as Apple would need to weigh the benefits of an Amex partnership against the potential cost implications for consumers and businesses.
Apple’s search for a new payment network comes at a time when the Cupertino-headquartered tech behemoth has been working to dissolve its partnership with Goldman Sachs, which has served as the Apple Card’s issuing bank since its launch. Goldman Sachs’ exit from the consumer banking sector has been driven by significant financial losses and regulatory scrutiny, amongst other factors.
The investment banking firm had initially entered the consumer market to diversify its revenue streams beyond traditional investment banking and trading, but the venture proved to be more costly than anticipated. Reports indicate that Goldman Sachs has lost billions of dollars on its consumer banking initiatives, instead.
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