Goldman Sachs scraps idea for direct-to-consumer credit card

Goldman Sachs has dropped plans to develop a Goldman-branded credit card for retail customers, another casualty of the firm’s strategic pivot, CNBC has learned.

Not long ago, CEO David Solomon told analysts that the bank was developing its own card, which would’ve made use of the platform Goldman created for its Apple Card partnership.

It was part of an ambitious vision Solomon had for serving everyday Americans by stretching beyond the core competencies of the 154-year old investment bank. A Goldman card would’ve been part of a suite of products, including a digital checking account, to help enhance the profit margins and loyalty of its retail efforts, according to people with knowledge of the matter.

That vision unraveled after Solomon bowed to pressure to stem losses from its consumer businesses as storm clouds gathered on the U.S. economy last year. In October, the bank split its retail operations in a corporate overhaul and later said it was shuttering its Marcus personal loans business and shelving plans to widely offer a checking account.

When it scaled back plans to become the primary bank for the masses, the rationale for a Goldman card evaporated, said one of the people, who declined to be identified speaking about a former employer.

Executives had believed consumers would covet a card from Goldman Sachs. After all, Apple had insisted that Goldman Sachs was etched on the back of its titanium cards, not the Marcus brand that Goldman unveiled in 2016, according to a person with knowledge of the matter.

It would allow the bank to be more choosy with who it approved as customers and wouldn’t require sharing revenue with a partner, as it does with Apple.

But launching its own card would be even more expensive than partnering with an outside brand, as Goldman would’ve footed the cost of acquiring customers and enticing them with rewards. Card giants including JPMorgan Chase and Citigroup have a combination of co-brand products with airlines and retailers and their own direct cards.

The concept of a Goldman card first surfaced in Oct. 2021 when an analyst asked Solomon about his consumer product roadmap. One idea was to use the card technology created to service Apple Card customers for its own card, he said.

“We have our own credit card platform that I think is really differentiated, and we’re onboarding both other partnerships, but also have the opportunity for a proprietary card that’s in development,” Solomon said.

Although the idea of a card offered with a suite of banking products was mentioned as recently as last summer by Goldman executive Stephanie Cohen, little had been done to actually develop it, according to people with knowledge of the situation.

The bank’s ambitions in consumer finance outstripped its ability to execute on them, Solomon acknowledged last month. It didn’t help that its existing card products caught the attention of regulators including the Consumer Financial Protection Bureau.

“The idea of a consumer-facing proprietary Goldman Sachs credit card was discussed but never became a meaningful part of our strategy,” said a spokesman for the New York-based bank.