JPMorgan Chase will acquire Apple's credit card business held by Goldman Sachs, ending the Wall Street firm's retail banking experience launched in 2019. The deal, announced Wednesday, transfers over $20 billion in credit card loans to the nation's largest credit card issuer and requires JPMorgan to record a $2.2 billion provision for credit losses in its fourth-quarter results.

What happened: Apple Card transition

JPMorgan emerged as the last candidate after American Express, Synchrony, and Barclays withdrew from negotiations in July, according to CNBC reports.

The bank acquired the portfolio at a discount of more than a billion dollars, according to a person close to the matter speaking on condition of anonymity.

Customers will retain the existing benefits of the card and the product will continue to operate on the Mastercard network, JPMorgan said in a statement.

The deal is expected to be finalized in about 24 months.

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Why it matters: shift in retail banking

The Apple Card portfolio contains more subprime borrowers and lower credit scores than those JPMorgan typically serves, people familiar with the matter told CNBC.

Apple pushed Goldman to approve as many iPhone users as possible for the card, according to these sources.

Goldman will record a gain of 46 cents per share from this deal in next week's results, completing largely the strategic exit from retail finance initiated by CEO David Solomon in 2022.

"Chase shares our commitment to innovation and delivering products and services that improve consumers' lives," said Jennifer Bailey, Apple's payments chief, in the statement.

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