Goldman Sachs launches installment loan business with JetBlue Airways

JetBlue planes at a gate of John F. Kennedy International Airport in New York.

Mark Kauzlarich | Bloomberg | Getty Images

Goldman Sachs is taking another step in the world of retail banking with an installment loan product launched with JetBlue Airways.

The bank quietly released a website this week for something called MarcusPay, 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 charges outside of interest, depending on the site.

Goldman is expanding its Marcus brand with installment loans, a digital wealth management tool and a checking account next year, the bank announced in January at its first-ever Investor Day. The move, which expands Marcus’ offerings beyond savings and personal loans, is CEO David Solomon’s bet to diversify the bank’s revenue 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 means of payment, helping it to become a priority for users and to penetrate into the daily lives of their customers.”

The partnership was in development months before the coronavirus pandemic brought most air travel to a halt. Since few people are booking trips for trips that are rolling out soon, MarcusPay is emerging as a payment option for vacation packages rolling out in the fall of this year, according to a person with knowledge of the situation. A JetBlue spokeswoman confirmed it was Goldman’s first product partner.

More 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 period, 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 payments.”

The bank wants to double the consumer deposits it holds to $125 billion over the next five years and generate $700 million to $900 million in pretax off-reserve revenue in the division.

With reporting by CNBC’s Leslie Josephs.

Comments are closed.