Barclays’ acquisition of the General Motors line of credit cards represents a significant achievement for the American branch of the United Kingdom-based bank. Barclays will take over the card business from Goldman Sachs.
Earlier this year, CEO C.S. Venkatakrishnan of Barclays prioritized expansion of their credit card services in America, particularly focusing on co-branded partnerships. Starting in the upcoming summer, Barclays will be the exclusive issuer of both the GM Rewards Mastercard and the GM Business Mastercard.
This collaboration will broaden Barclays’ presence in the credit card market in America, which already includes prestigious brands such as American Airlines and Gap. The Gap cards were particularly notable as they were the first standalone private-label credit cards provided by Barclays without operating on an open-loop network like Visa or Mastercard.
Goldman had managed the GM credit card program since 2022, allowing customers to earn points towards buying or leasing GM vehicles. Barclays had previously bid on the GM credit card program in 2020 but lost to Goldman, who reportedly paid $2.5 billion to acquire it from Capital One.
“The significance lies in Barclays purchasing the receivables from Goldman Sachs as they unwind their card business,” explained Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research. “Barclays, meanwhile, remains strong in this sector.”
Headaches for Goldman
Goldman is reportedly looking to offload its Apple Card business as well, with JP Morgan being the top contender. The Apple Card partnership was formed in 2019, but, according to Riley, “the Apple Card will be the next to be divested.”
Morningstar reports that Goldman’s Platform Solutions unit, responsible for the GM credit card program among other services, suffered approximately $6 billion in losses on a pretax basis from the beginning of 2020 up to Q1 of 2024. In early 2023, Goldman discontinued plans for a consumer card bearing its own brand.
Last October, it seemed like Goldman was exiting consumer lending altogether. The bank sold most of its personal loan portfolio, as well as a BNPL lending business, at a loss just a year after acquiring it. In addition, Goldman found a buyer for its personal finance unit tailored for the mass affluent and sold specialty lender GreenSky to Sixth Street Partners and a group of other companies.
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Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
