Amazon Considering a Credit Card Breakup with Chase

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Amazon Considering a Credit Card Breakup with Chase

Reports indicate that Amazon is in the process of soliciting proposals from prospective companies in an effort to find a new issuer for its Amazon Prime Rewards Visa Signature Card and Amazon Rewards Visa Signature Card. American Express and Synchrony Financial are both competing for Amazon’s business. American Express provides the company’s corporate credit cards, while Synchrony Financial manages the Amazon retail card portfolio as well as a secured credit card. The Amazon rewards card portfolio owned by Chase might be put up for sale, as indicated by persons with knowledge of the current circumstances.

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  • Investopedia requires its contributors to support their work with references to the original sources. White papers, figures from the government, original reporting, and interviews with industry experts are some of the things that fall under this category. When it is appropriate to do so, we also credit original research that was published in other reputable journals. In our editorial policy, we give further information on the criteria that we use in order to present material that is factual and balanced.
  • Investopedia requires its contributors to support their work with references to the original sources. White papers, figures from the government, original reporting, and interviews with industry experts are some of the things that fall under this category. When it is appropriate to do so, we also credit original research that was published in other reputable journals. In our editorial policy, we give further information on the criteria that we use in order to present material that is factual and balanced.
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Amex and Synchrony Financial Fighting for Amazon’s Business

In 2002, Amazon and Chase worked together to create the first Amazon-branded credit card, but the two businesses are now discussing the possibility of dissolving their existing arrangement.

According to Bloomberg1, Amazon is reportedly taking into consideration bids made by American Express and Synchrony Financial about the Amazon Prime Rewards Visa Signature Card and the Amazon Rewards Visa Signature Card portfolio.

Both of these credit cards have more than $15 billion in outstanding debts combined, and their combined annual spending limit is over $50 billion.

These numbers will, without a doubt, pique the interest of potential bidders; yet, it is possible that the high cost of the rewards program is the reason Chase is so keen to move on from the major line of business.

Amazon Prime customers in the United States, who number 147 million, are eligible to get a cash back bonus of 5% on any and all purchases made via Amazon.com and Whole Foods Market. If you are not a member of Amazon Prime, your rate of rewards will be 3%.

In addition, cardholders get a cash back reward of 1% on all other transactions and 2% back on purchases made at restaurants, gas stations, and pharmacies. However, if consumers primarily use their credit cards to make purchases at Amazon and Whole Foods Market, it may be difficult for Chase to generate a sufficient amount of profit from the portfolio.

Since Amazon currently collaborates with Amex and Synchrony on other cards, it may seem to be an ideal option for the credit card companies to work with Amazon. For instance, American Express issues two business credit cards, whilst Synchrony is in charge of the store credit cards used at the shop and were first launched in 2015. In 2019, Synchrony also introduced a secured credit card that was branded with the Amazon logo.

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