JetBlue aircraft at a gate at John F. Kennedy International Airport in New York.
Marc Kauzlarich | Bloomberg | Getty Images
Goldman Sachs takes a new step in the world of retail banking with an installment loan product launched with JetBlue Airways.
The bank quietly released a website for something called MarcusPay this week, allowing users to split large purchases into monthly payments. Loans ranging from $ 750 to $ 10,000 are repaid over 12 or 18 months at a fixed rate of 10.99% to 25.99%, with no fees other than interest, according to the site.
Goldman is expanding its Marcus brand with installment loans, a digital wealth management tool and a checking account next year, the bank said in January on its very first Investor Day. The move, which extends Marcus’ offerings beyond personal savings and loans, is CEO David Solomon’s bet to diversify the bank’s income away from volatile trading and advisory operations.
“This is a natural next step for Goldman,” said Ian Kar, author of the Fintech Today newsletter. “The installment product transforms Marcus into a payment method, helping it become a priority for users and integrate into the daily lives of their customers.”
The partnership was under development for months before the coronavirus pandemic put an end to most air travel. Since few people are booking trips for trips that are coming soon, MarcusPay is emerging as a payment option for vacation packages that are happening in the fall of this year, according to a person with knowledge of the situation. A spokesperson for JetBlue confirmed that it was the first partner of the Goldman product.
Other partnerships will follow, as Goldman has made it clear that integrating its services with large companies is a key part of its strategy.
“During this time, our number one priority is the health and safety of our customers,” said Abhinav Anand, head of consumer loans at Marcus. The new service will allow JetBlue customers to “buy what matters to them, when it matters, and pay for it in equal installments with no fees or upfront payment.”
The bank wants to double the consumer deposits it holds to $ 125 billion over the next five years and generate pre-tax profit of $ 700 million to $ 900 million excluding the division’s reserves.
With reporting from Leslie Josephs of CNBC.