JPMorgan Chase has agreed to purchase one of the largest third-party credit card loyalty operators in a bet that pleasure travel will strongly recover after the coronavirus pandemic subsides, CNBC has learned.
The bank approved Monday to acquire the technology platforms, travel agency, gift card and points business of cxLoyalty Group, a privately held Stamford, Connecticut company, according to a person with direct knowledge of the deal.
JPMorgan is hiring about half of the company’s 3,100 employees in the transaction and will set up a new business within its retail division, reporting to Marianne Lake, head of the consumer credit bank, the person said. The transaction will close this week, but the person declined to say how much the bank paid.
“People all over the world want to vacation and travel again, and hopefully that will become a reality for many in the near future,” Lake said in a statement. “By acquiring cxLoyalty’s travel and rewards business, our millions of Chase customers will have a better experience 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 using Expedia. Now, the bank will eventually return to using cxLoyalty as the technical platform supporting its travel program, with an emphasis on providing personalized recommendations based on users’ travel history.
The rewards company serves many of the largest US card companies, including Citigroup, Capital One and Mastercard. In total, cxLoyalty Group says it has 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 the new JPMorgan company, 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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