Goldman Sachs To Pay $2.5B For General Motors' Credit Card Business - pymnts.com

Goldman Sachs To Pay $2.5B For General Motors' Credit Card Business - pymnts.com


Goldman Sachs To Pay $2.5B For General Motors' Credit Card Business - pymnts.com

Posted: 01 Oct 2020 06:58 PM PDT

Goldman Sachs has beat out competitor Barclays to buy General Motors (GM)'s credit card business, according to a report from The Wall Street Journal (WSJ).

The purchase will go through for approximately $2.5 billion, and it furthers Goldman Sachs' push into Main Street lending. By beating Barclays in the deal, Goldman now has access to the over 1 million cardholders who account for roughly $8.5 billion in spending per year, WSJ reported.

In their pitches to GM, both Goldman and Barclays promoted the idea of cars as eCommerce portals, a notion supported by auto makers and card networks like Visa and Mastercard. GM was the first company to let drivers use touchscreens to do things like order food, pay for gas or book hotels.

Goldman's bid for GM's card business shows the promise many companies see in connected commerce, such as the vehicle eCommerce idea, PYMNTS reported.

Goldman has worked out a rough deal with Capital One Financial Group, with the purchase price included. WSJ reported sources said the deal is expected to be finalized in the next few weeks unless it falls apart. Goldman will likely pay a slight premium, intending to make up any losses by selling its own products to GM cardholders, such as online savings accounts, personal loans and investment products.

Without a well-known brand or branches, Goldman has turned to partnerships like the Apple Card, which had $4.5 billion in outstanding balances as of June 30, and a deal to lend to JetBlue Airways passengers and Amazon marketplace sellers, WSJ reported.

Goldman has now won two victories in the credit card sphere with its Apple Card launching last year. Now, it plans to look for other such deals to enter into, according to WSJ. However, that could prove difficult. Banks are deferring payments for millions of cardholders, and they're now setting aside billions of dollars to cover losses in case the debts don't get paid back.

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PYMNTS TV LIVE OCTOBER SERIES: B2B PAYMENTS 2021 – WHAT WILL YOU CHANGE? 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

Mastercard, Instacart To Provide Grocery Delivery Benefits To Cardholders - pymnts.com

Posted: 01 Oct 2020 05:32 PM PDT

Shoppers who use a U.S.-issued Mastercard to pay for groceries delivered by Instacart are being offered a way to save money, the New York-based global financial services corporation said in an announcement.

Starting Thursday (Oct. 1) through March 31, Mastercard cardholders without an Instacart Express membership are eligible to receive two months free when they sign up for an annual membership for $99. A Mastercard is required as the default payment method. The feature is also available for debit, small business and prepaid card users, according to the announcement.

An Instacart Express membership provides customers with unlimited free delivery on all orders of $35 or more, as well as a reduced service fee.

"One thing is certain — consumers will continue to seek out digitally-driven experiences regardless of what the future holds," said Jess Turner, executive vice president of Mastercard's North America products and innovation, in the announcement. "We are using our technology and partnerships to make sure our products can power both value and convenience in their everyday lives as well as the priceless possibilities that lay ahead of us."

Instacart, a San Francisco-based startup, partners with more than 400 retailer chains to offer delivery and pickup of groceries from more than 30,000 stores across 5,500 cities in the U.S. and Canada, according to the announcement.

In August, Walmart partnered with Instacart to offer same-day delivery across select markets in the U.S.

It's a partnership that adds to Instacart's roster of retailers as it seeks to gain critical mass in an ongoing battle against Amazon and its subsidiary, Whole Foods. Instacart already has relationships with Target, Costco and Kroger, among others.

Instacart had been Amazon/Whole Foods' exclusive delivery partner before the deal ended two years ago. Today, Amazon offers its own grocery delivery via Amazon Prime Now and Amazon Fresh, leveraging its presence through Whole Foods and through Amazon Prime.

Last month, Instacart announced its first deal with a convenience store chain, adding 7-Eleven to its online ordering platform. Initially, it will make deliveries from 750 stores nationwide in a first phase covering Virginia; Maryland; Washington, D.C.; Florida; and Texas.

Instacart said it plans to follow this up with a nationwide rollout over the next few months that will eventually include more than 7,000 7-Eleven stores across the country.

——————————

PYMNTS TV LIVE OCTOBER SERIES: B2B PAYMENTS 2021 – WHAT WILL YOU CHANGE? 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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