What’s Next for Goldman’s Marcus Banking Strategy?

Marcus announced it will soon launch its second consumer card after the Apple Card, in conjunction with GM. The consumer banking firm says it is looking to partner with other “like-minded brands" in the card business, but is coy about its checking plans.

With its partnership with GM and Mastercard on a brand-new rewards card, Marcus by Goldman Sachs is continuing to extend its reach into consumer financial services.

Marcus partnered with GM on the creation of a new loyalty rewards card called the My GM Rewards Card. This new card will be associated with the My GM rewards program, which launched in 2018 and has approximately six million members currently. Customers who have current GM loyalty cards from other programs will be transitioned into the new My GM Rewards Card. Previous GM cards were issued by Capital One and will now be managed by Marcus.

“This is the first enterprise-wide comprehensive loyalty program in the automotive space,” says Julie Heisel, director of GM Rewards and GM Card.

Goldman initially acquired the GM credit card portfolio in Oct 2020 for $2.5 billion as reported by The Wall Street Journal. The new rewards card is the first newly created joint product offered by Goldman and GM. It continues the expansion of Goldman Sachs into consumer banking via its Marcus brand, and should help grow brand awareness for Marcus among consumers who may not be aware of its offerings.

Making Inroads:

Marcus continues to partner to add to its consumer financial offerings — now adding six million GM loyalty program customers into its ecosystem.

That’s a thought that could keep its traditional banking competitors up at night. Long a genteel name in the world of investment banking, the 2016 launch of Marcus was the firm’s first consumer offering. The Marcus platform began with an online savings account and personal loan offering and has since expanded with the acquisition of the deposit base of GE Capital Bank and the personal finance management capability and customer base of Clarity Money. In 2019, Marcus introduced a highly successful consumer credit card in conjunction with Apple. It launched Marcus Invest in early 2021.

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Now, Marcus will add the six million GM rewards customers into its ecosystem, as well as any new customers that sign up for the GM rewards card. Card users will be able to sign up through Marcus to manage their My GM Rewards Card.

“Our vision is to create the leading platform for millions of consumers to take control of their financial lives,” said John Lazzati, managing director, consumer cards for Goldman Sachs during a media conference call. “We want to help consumers spend, save, borrow and invest with simple and transparent products.”

All existing customers will be invited to create a Marcus account when the conversion from Capital One takes place in February 2022 and can earn bonus rewards for setting up their account online or in the app. Customers will be able to view their transactions, account balance, and rewards balance as well as access their virtual card number through Marcus.com or the Marcus app.

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Expanding Card Portfolio

This marks the second partnership on a consumer card for Marcus, following the 2019 rollout of the Apple Card. Free sign up is available to any current or past Chevrolet, Buick, GMC, or Cadillac customers. With three membership tiers — Silver, Gold and Platinum — consumers can move up as they spend, according to GM. Each tier unlocks higher points earnings and redemption caps. Gold and Platinum rewards members can now redeem points toward the purchase of GM Certified Pre-owned vehicles and their points do not expire. Points can be redeemed as soon as they are earned.

Some of the reward features highlighted by GM include:

  • Unlimited 7X points for every $1 spent at GM.
  • Unlimited 4X points for every $1 spent everywhere else.
  • Points do not expire with an open account in good standing.
  • Earn a $100 card statement credit when users spend $1,500 on fuel or pay six months of electric bills for a registered electric vehicle per calendar year.
  • Up to $50 per year applied toward a vehicle detailing charge from a participating dealer.
  • Immediate Gold Tier in My GM Rewards, upon card approval.
  • World Elite Mastercard benefits.

The card has a 0% introductory APR for the first nine months, followed by a variable rate from 14.99% to 24.99%.

Marcus is continually looking at potential partnerships when it comes to consumer cards, notes Lazzati, with companies that “share a common goal.”

“Our goal is to leverage our technology and innovation to bring customer-centric products to market,” he states.

What to Watch:

Marcus could potentially expand its partnership with GM in the future to offer additional financial products.

Goldman could expand its partnership with GM, such as by enabling in-car purchases. This will likely be only the first of many collaborations between GM and Marcus on financial products, Heisel notes.

Lazzati adds that the partnership will benefit current Marcus by Goldman Sachs customers who can easily apply for the card within the platform.

“We’re always looking for opportunities to provide our existing Marcus customers with value,” Lazzati states.

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When will a Marcus Checking Account Arrive?

Though this move edges Goldman Sachs further into consumer financial services, there was no mention or update on the long-discussed Marcus checking account during the My GM Rewards Card announcement. In a previous interview with The Financial Brand’s Co-Publisher, Jim Marous, Dustin Cohn, Head of Brand and Marketing at Marcus by Goldman Sachs said the firm was eyeing 2021 for the launch of a checking account.

In a Banking Transformed podcast in early 2021, Sonali Divilek, Head of Product for Consumer Business of Goldman Sachs (now Head of Digital Products and Channels at Chase), confirmed that the timeline for a Marcus checking account launch was later in 2021. As of the beginning of 2022, however, the checking account still had not materialized.

“To do something that is differentiated and done really well takes a little bit of time,” Cohn told Marous. “People forget that we’ve only been around for three years,” Cohn said at the time. “We’ve grown pretty substantially in that three years, but we try to do it in a very thoughtful, methodical way.”

For now, Marcus appears content to focus on its consumer card business.

“We have created a consumer banking platform that will continue to serve our cardmembers as well as many more consumers who are now able to access our products and technology through ecosystems of others,” the company said in an email response to a question from The Financial Brand about the status of a Marcus checking account.

“Right now, we are focused on our existing credit card programs, including the new My GM Rewards Card. As we continue to expand in the card business, we are looking forward to partnering with other like-minded brands.”

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