- Goldman Sachs taps Marqeta to polish its checking account.
- The bank has been slowly growing its consumer banking prowess, and a digital assist from Marqeta could boost its strategy of cross-selling its forthcoming checking account to its existing customers.
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The bank announced that it will work with California-based digital payments fintech Marqeta on building its Marcus checking account offering, expected to debut later this year, Bloomberg reports.
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Marqeta’s technology will be used to issue debit cards into mobile wallets and to underpin offerings that provide clients with real-time spending data access. While Goldman has not disclosed much information about the offering, it was announced in October 2020 that Visa would issue the accounts’ first debit cards.
2020 was an extremely busy year for Goldman Sachs in terms of expansion of its nascent consumer banking arm:
- It finally rolled out an app for Marcus. The iOS version debuted in January, with Android coming three months later. The move was long overdue: Marcus was launched in 2016, and the lack of a mobile app had been a pain point for customers who could only view account information, make loan payments, or transfer balances on the Marcus website.
- It teamed up with both Amazon and Walmart to offer loans to sellers on their marketplaces. In June 2020, Amazon and Goldman announced that Marcus would make revolving credit lines available to Amazon Marketplace sellers. The bank followed that up in September by offering loans to businesses on the Walmart Marketplace as well. These expansions of its lending offerings broadened Marcus’ exposure and opened it to a massive revenue-generating opportunity.
- Finally, the bank bought General Motors’ (GM’s) credit card business. In its second major credit card move—after the 2019 Apple Card deal—Goldman announced in October that it would buy GM’s credit card business for $2.5 billion. The bank’s strong moves into the lucrative credit and lending space position Goldman to significantly raise its consumer business’s bottom line.
Its Marqeta collaboration could help Goldman create a mobile checking account user experience that sets it apart from competitors. Once Goldman launches its debit card in full, it will need to find a way to distinguish itself from competing checking account offerings from other digital banks (as well as incumbents).
Its first strategy should be to try to cross-sell the account to its existing loan and high-yield savings accounts, as its deposits have been on the rise, hitting $96 billion in Q3 2020, suggesting a significant amount of interest in Marcus.
The technology that Marqeta can bring to the Marcus checking account—such as spending insights data and mobile wallet compatibility—could help boost its value proposition to clients that already enjoy its user interface, as well as those looking for a slick digital user experience.
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