Dive Brief:
- Goldman Sachs is partnering with digital payments startup Marqeta to launch checking accounts this year for Goldman's consumer bank Marcus, Marqeta said Thursday in a press release.
- Goldman plans to use Marqeta's technology to issue debit cards connected to the accounts through mobile wallets, and to add offerings that give customers real-time access to spending data, Marqeta CEO Jason Gardner said. "You can instantly issue those cards into Apple Pay or Google Pay and it instantly gives consumers access to their funds," he told Bloomberg.
- Goldman is considering bolstering Marcus through acquisitions, Reuters reported, citing three bank sources. But management has set an "extremely high" bar, adding that any deal should be large and transformational, they said.
Dive Insight:
Marcus amassed $96 billion between its 2016 launch and Sept. 30, the latest date for which figures are available. Updated numbers should come Tuesday, when the bank presents its fourth-quarter earnings. But executives have slowed loan and deposit growth at the consumer bank out of concern over loan quality in a downturn. The bank added just $4 billion of deposits in the third quarter after adding $32 billion during the first half, Reuters reported.
Goldman is expected to stick to the goal it laid out last year to reach $125 billion in deposits by 2025, sources told Reuters. But it may warn that it'll take longer than expected to expand its consumer loan and credit card balances to $20 billion by that time, they said.
As to Marcus's future, executives are ruling out any tie-ups that involve acquiring branches, as the pandemic has buoyed management's belief that digital activity will be central to growth, Reuters reported. Digital businesses that bring in new customers or unique technologies would be attractive acquisition targets, a source told the wire service.
"Integrating with Marqeta's platform will allow us to create a personalized, feature-rich banking experience for our checking customers," Omer Ismail, Goldman Sachs's global head of the consumer business, said in the Thursday press release announcing the checking account project.
Gardner called the partnership "a true validation of the power of [Marqeta's] technology."
Ties run deep between Goldman and Marqeta, which promises better controls on payments and a short turnaround to market for new credit cards. The bank was among the company's early backers and is helping to underwrite Marqeta's upcoming initial public offering, which could value the company at $10 billion, Bloomberg reported.
Visa announced in October that it would serve as the network for Marcus debit cards.
