JPMorgan Chase has agreed to acquire one of its largest third-party credit card loyalty operators in a bet that pleasure travel will return abruptly after the coronavirus pandemic disappears, CNBC has learned.
The bank agreed on Monday to buy the technology platforms, travel agency, gift card and point companies of cxLoyalty Group, a private company in Stamford, Connecticut, according to a person with direct knowledge of the transaction.
JPMorgan is taking over about half of the company’s 3,100 employees in the transaction and will set up a new business in its retail division, said Marianne Lake, the bank’s head of consumer lending, the person said. The transaction will close this week, but the person refused to say how much the bank paid.
“People around the world want to lay off and travel again, and we hope this will become a reality for many in the near future,” Lake said in a statement. “Purchasing cxLoyalty travel and reward companies will provide enhanced experiences for our millions of Chase customers once they are ready, comfortable and confident in their travels.”
JPMorgan partnered with cxLoyalty for its popular credit card rewards program until 2018, when the bank switched to using Expedia. Now, the bank will finally return to using cxLoyalty as the technology platform behind its travel program, with a focus on providing personalized recommendations based on users’ travel history.
The rewards company serves many of the largest card companies in the US, including Citigroup, Capital One and Mastercard. Overall, 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, the head of JPMorgan’s new business, according to a separate statement. JPMorgan does not buy the company’s other main business, it is the Global Customer Engagement division.
This story is developing. Please check again for updates.