Jeff Bezos and Jamie Diman.

Getty Images | CNBC

Amazon has decided to extend the deal, which allows JPMorgan Chase to issue a flagship credit card of the technology giant, stopping months of heated negotiations, according to CNBC.

According to people familiar with the negotiations, the Amazon Prime Rewards card was one of the most coveted joint deals in the industry, a rare prize due to Amazon’s extensive loyalty program with an estimated 150 million members in the US.

Although JPMorgan released the Amazon card since two decades ago it was little more than an online bookseller, this hasn’t stopped Amazon from promoting rates to replace the bank in mid-2021. American Express and Synchrony were among the issuers involved in the discussions, and Mastercard hoped to oust Visa as a payment network, said people who declined to name their identity, speaking of a private process.

“It was a unique opportunity to break into Amazon and change my card business,” one person said. “If Chase loses, it will be a shot heard around the world of payments. Any winner will get instant credibility and a new Wall Street growth story.”

Credit card deals with popular brands including Amazon, Costco and American Airlines have become some of the toughest contracts in the financial world. This is because they instantly give the issuing bank an audience of millions of loyal customers who spend billions of dollars a year. The largest contracts may account for a disproportionately large share of the issuer’s business; American Express lost 10% of its cards in circulation when Citigroup won an application for a Costco card in 2015.

Card transactions are so important to banks that it is known that CEOs including Jamie Diman of JPMorgan and Jane Fraser of Citigroup are known to be involved in transaction hashing.

Intense conversations

Amazon’s discussion of the card included JPMorgan’s position that it could abandon the two-year partnership and sell its loan portfolio, Bloomberg reported in June. The loans issued by Amazon Prime customers, which are in the division of Chase Bank, amount to about $ 20 billion, sources said. This will entail a difficult process of switching millions of customers to the new bank, while making sure their cards are still working flawlessly.

Perhaps this was a negotiation tactic by JPMorgan, because while Amazon experienced rapid growth during the pandemic, when people were forced to stay at home, other segments known for Chase maps – hotels, restaurants and entertainment – fell sharply. This made Amazon even more important to America’s largest asset bank.

Despite their importance to banks and American consumers, who have become obsessed with maximizing card rewards, the contracts themselves are shrouded in secrecy. Amazon required participants to sign non-disclosure agreements and launched its own RFP, or request for proposals, for the deal, mostly excluding third-party consultants, one person said.

Known for conducting tough deals with partners, Amazon has pushed issuers to agree to their terms, people say. This included maintaining a rich card remuneration rate of 5% for purchases on and Whole Foods, as well as the need to share income from lending, as well as discounts on some exchange fees that banks typically hold.

It is unclear whether Amazon was able to negotiate these terms with JPMorgan, people said.

Longer deals

As major retailers have reduced their leverage over banks over the past decade, forcing lenders to agree to tougher income distribution terms and offer richer rewards, the duration of transactions has become longer. According to industry participants, what was usually a five-year contract has stretched to seven- and ten-year or even longer, giving banks a better chance of making money on cards. For example, Citigroup’s deal with Costco is actually for ten years, two people said.

Several participating banks hoped that they would be able to displace JPMorgan at least for part of the business, perhaps by calling them a secondary issuer along with Chase. American Express and Synchrony have other cards from Amazon, including small business offerings and private labels. They and other banks declined to comment on the story.

The payment network Mastercard experienced a revelation last year amid a dispute between Amazon and Visa over exchange fees that the e-commerce giant is forced to pay. Mastercard has asked interest from banks, including American Express, to find out if they can team up to oust Chase and Visa, one man said. Last month, Visa and Amazon reached a global agreement that allowed Visa cardholders to continue using their cards.

In the end, Amazon decided to stay with JPMorgan and the Visa network. The corporate relationship lasted until 2002, when a lender from Chicago called Bank One (led by CEO Jamie Diamond at the time) first signed a promising young online company into a card deal. Bank One was acquired by JPMorgan two years later.


The personal relationship between Diamond and Amazon founder Jeff Bezas goes even further, in the early days of Amazon. Diman said he was even briefly amused to join Amazon before joining Bank One. Most recently, leaders set up a joint venture with three companies from Berkshire Hathaway called Haven, which aimed to disrupt U.S. health care before ending efforts in 2021.

The latest deal from the companies means that little will change for users of the popular Amazon Prime Rewards Visa Signature card. Prime members will still receive 5% of purchases on and Whole Foods – the highest rate among bonus cards – as well as 2% in restaurants, gas stations and pharmacies and 1% elsewhere.

In a brief statement from CNBC, Amazon vice president Max Bardon said the company is looking forward to “continuing our work with Chase and its technology and capabilities to allow Amazon customers this seamless payment option with added benefits.”

In turn, JPMorgan advertised a “multi-year” deal with the co-brand and said it was “incredibly proud” of its relationship with Amazon.

“Looking to the future, we are excited to continue to deliver new features for this product that will delight card subscribers,” said Chase co-CEO Marian Lake.

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