October 30, 2020

Goldman Sachs Is Partnering With Walmart to Expand Its Consumer Banking Business

Until a couple of years ago, Goldman Sachs (NYSE: GS) was almost exclusively an investment bank. However, over the past few years it has started to make a big push into the consumer banking side of the business. First, it rolled out the Marcus brand, which offers personal loans and high-yield savings accounts. Then, Goldman jumped head-first into the credit card business by partnering with Apple (NASDAQ: AAPL) to launch the Apple credit card product.

More recently, Goldman introduced an investment platform for everyday Americans, and partnered with Amazon (NASDAQ: AMZN) to provide small business credit lines to merchants. And as if pairing up with Amazon didn’t give Goldman enough reach into the e-commerce world, another major partnership was just announced.

Man holding fanned-out $100 bills

Image source: Getty Images.

Goldman and Walmart are teaming up

The latest expansion of the Marcus brand’s reach comes in the form of a small business lending partnership with Walmart (NYSE: WMT).

Goldman’s consumer banking unit is launching small business credit lines to merchants who sell on Walmart’s Marketplace. Initial credit lines will range from $10,000 to $75,000, but the bank eventually wants to offer lines of as much as $1 million to qualifying merchants. And these could be highly profitable for Goldman, as the credit lines will come with fixed interest rates between 6.99% and 20.99%.

This could end up being a big boost to Goldman’s consumer lending business. Walmart’s online sales volume nearly doubled year over year in the second quarter, and through a new partnership with Shopify (NYSE: SHOP) to help sellers list items on its platform, this could be just the beginning of the retail giant’s push into e-commerce.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matthew Frankel, CFP owns shares of Apple and Goldman Sachs and has the following options: short October 2020 $140 calls on Apple. The Motley Fool owns shares of and recommends Amazon, Apple, and Shopify and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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