Recent reports indicate that Goldman Sachs is interested in adding to its consumer banking presence, possibly with an acquisition of the GM credit card business. According to a recent report from the Wall Street Journal, which cites people familiar with the matter, Goldman Sachs is actually one of several financial institutions vying for a piece of the General Motors credit card business.
General Motors partnered with Capital One to introduce a GM credit card in 2012. The credit card includes a points reward system which can then be applied towards the purchase of a new GM vehicle. There’s currently about a year left in the contract between Capital One and GM, which has apparently led to interest from competing financial institutions.
According to the recent Wall Street Journal report, the GM credit card business has roughly $3 billion in outstanding balances.
Goldman launched its own credit card last year in a partnership with Apple, using location data to track spending habits. Goldman has expressed interest in adding more merchants in the near future.
Beyond Goldman Sachs, other bidders for the GM credit card business are apparently in the running as well, including Barclays. At this point, there’s no indication that GM will opt to replace Capital One as its card issuer when the contract expires, but according to the recent report, a decision is expected in the next few weeks.
Bidders are pitching the idea that customers will do more in-vehicle purchases from the driver’s seat, with automobiles essentially acting as e-commerce portals. General Motors has already adopted this idea, offering customers the ability for in-dash payments on things like gasoline and book hotel rooms.
However, with an overarching trend among consumers towards a more seamless buying experience, as well as the added pressures of the COVID-19 pandemic moving things towards a more digitized consumer landscape and greater reliance on e-commerce, the idea could hold even more weight.