JPMorgan Chase has agreed to buy one of the largest third-party credit card operators in a bet that leisure travel will recover quickly after the coronavirus pandemic subsides, CNBC learns.
The bank agreed on Monday to acquire the technology, travel agency, gift card and points business platforms from cxLoyalty Group, a private company based in Stamford, Connecticut, according to a person with direct knowledge of the business.
JPMorgan is hiring about half of the company’s 3,100 employees in the transaction and will create a new business within its retail division, reporting to Marianne Lake, head of the bank’s consumer lending business, the person said. The transaction will close this week, but the person declined to say how much the bank paid.
“People around the world want to vacation and travel again, and hopefully it will become a reality for many in the near future,” Lake said in a statement. “Acquiring cxLoyalty’s travel and rewards business will provide enhanced experiences for our millions of Chase customers once they are ready, comfortable and confident to travel.”
JPMorgan partnered with cxLoyalty for its popular credit card rewards program until 2018, when the bank switched to Expedia. Now, the bank will eventually return to using cxLoyalty as the technology platform that underpins its travel program, with an emphasis on giving personalized recommendations based on users’ travel history.
The rewards company serves many of the largest US card companies, including Citigroup, Capital One and Mastercard. Overall, cxLoyalty Group claims to have 3,000 customers and marketing partners serving 70 million consumers.
The deal will make Todd Siegel, CEO of cxLoyalty Group Holdings since 2013, head of JPMorgan’s new business, according to a separate statement. JPMorgan is not buying the company’s other core business, it is the Global Customer Engagement Division.
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