Goldman Sachs, Eager to Grow Cards Business, Courted Credit-Card Technology Firms
Bank executives expressed interest in buying a fintech that could help it win more credit card programs
Goldman Sachs Group Inc. GS +1.06% has expressed interest in buying a payments-technology firm to further build out its credit-card capabilities, according to people familiar with the matter.
Goldman executives had discussed acquiring Deserve, a fintech credit-card platform that the bank already has close ties to, according to people familiar with the matter. Executives also sounded out another fintech credit-card platform called Cardless and a payments company called CoreCard Corp. CCRD +3.01% , the people said.
Outreach from Goldman’s executives to Deserve executives began last year, people familiar with the matter said. The most recent overture came last month, they said.
No official discussions are currently taking place between Goldman and the companies, the people said.
A Goldman spokesman said the bank has already built technology platforms that enable it to help card partners grow their businesses and serve their customers. “We have the ability to scale these businesses with our existing technology and are not currently looking for acquisitions in the space,” the spokesman said.
Goldman, long the epitome of high finance, has been trying to round out its investment banking and trading units in part by growing its cards business. But progress has been slow.
Goldman previously bid to take over the credit-card programs of JetBlue Airways Corp. and Macy’s Inc. but lost out, The Wall Street Journal previously reported. The bank successfully bid to take over the General Motors Co. credit-card program in 2020, but technology glitches delayed the rollout, the Journal previously reported. Goldman launched a credit card with Apple Inc. in 2019, and Apple encourages cardholders to use the card with Apple Pay.
Goldman recently announced a broad restructuring that included moving its card partnerships with Apple and GM into a new unit called Platform Solutions.
Bulking up its payment technology could help Goldman better compete against bigger banks when bidding on credit-card partnerships, people familiar with the matter said. Executives wanted to better prepare for what they believed would be a string of tech companies that would want to quickly launch credit-card programs embedded within their apps, the people said.
Goldman is CoreCard’s biggest customer by consolidated revenue, according to a recent regulatory filing by CoreCard.
Deserve currently powers credit cards for private student loan lender Sallie Mae, financial-services startup GloriFi, BlockFi’s crypto rewards credit card and others. Deserve’s platform can allow cardholders to view and dispute their transactions, make payments, redeem rewards, and change their contact information within partners’ apps, among other things. However, its services appear to consumers as though they are coming from the partner company rather than Deserve.
Goldman became an investor in Deserve in 2019, and a Goldman managing director is on Deserve’s board. The bank recently facilitated a credit line for Deserve.
Payments company Marqeta has also been courting Deserve, which could give it a better chance at winning bids for credit-card co-branded programs, according to people familiar with the matter.