Walmart and Goldman Sachs are partnering on a lending product for Walmart Marketplace sellers through Marcus

• Walmart and Goldman Sachs are partnering on a lending product for Walmart Marketplace sellers through Marcus.
• This move opens up customer acquisition and overall growth opportunities for Marcus.
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The bank will offer credit lines through its digital-only offshoot Marcus to small- and medium-sized businesses (SMBs) that sell on Walmart’s Marketplace platform, Yahoo Finance reports. 

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Eligible sellers can apply for credit lines between $10,000 and $75,000—with the goal of eventually lending up to $1 million—at a fixed annual interest rate between 6.99% and 20.99%. For context, Goldman moved into consumer banking in 2016 with the launch of Marcus, which offers a high-yield savings account and personal loans through its online platform.

Partnerships with major retailers and tech companies are becoming central to Goldman’s consumer banking strategy. The storied investment bank has taken aggressive steps in the past year to tie its relatively nascent consumer banking products to high-profile brands.

In June, it partnered with Amazon to offer Marcus loans to SMB sellers on the retail giant’s Marketplace platform. And earlier this year, Goldman teamed up with JetBlue on an installment loan product, MarcusPay. Outside of Marcus, its other major consumer-facing initiative was partnering with Apple on the latter’s flagship credit card, Apple Card.

Partnering with Walmart could afford Goldman key growth opportunities to build out Marcus:

• Direct access to Walmart’s robust seller network could help Marcus improve its lending model. The major retailer now counts more than 50,000 sellers on the platform, and it’s growing fast, having added over 5,000 sellers since partnering with Shopify in June, per Retail Dive. That opens a big data opportunity for Marcus, as it can then leverage applicants’ provided data to sharpen its lending model: The more data it has to work with, the more accurately it can assess prospective borrowers’ creditworthiness.
• A presence on Walmart’s Marketplace could boost brand recognition and customer acquisition potential for Marcus. All eligible sellers will receive an email invitation to apply for a Marcus loan, meaning thousands will be exposed to Marcus’ brand name and offerings. Even if they don’t ultimately take a loan through the Walmart partnership, the exposure could keep Marcus top-of-mind should those sellers need personal financial services in the future, independent of their business activities with Walmart. 

The Walmart partnership will work in tandem with Goldman’s other efforts to hit its ambitious growth goals for its consumer segment. With Marcus, Goldman wants to “deliver a retail bank branch through your phone,” as exec Eric Lane previously said.

Steps it’s taken toward doing so include the debut of a long-awaited app and a forthcoming checking account offering. Results so far have been good, as it reported record growth in consumer deposits in Q2 2020. With the addition of the Walmart partnership, Goldman appears poised to continue this trajectory.

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