FinTech: Goldman Sachs Eyes JetBlue’s Credit Card Business
Goldman Sachs runs Apple Cards in partnership with Apple (NASDAQ: AAPL). It recently snapped up GM’s credit card business, pipping Barclays to the finish line.
As Goldman Sachs (NYSE: GS) continues its determined advances in consumer finance, it is eyeing yet another card business. This time it is making a play for JetBlue’s (NASDAQ: JBLU) credit card program, currently operated by, again, Barclays (LON: BARC). (Fox Business)
Barclays under siege?
In news originally broken by WSJ, the Wall Street investment bank is said to be already in talks with JetBlue, even though the airline’s contract with Barclays is valid for approximately another three years.
However, nothing is finalized, and JetBlue may still decide to continue with incumbent bank Barclays.
In 2016, JetBlue shifted its credit cards from AmEx (NYSE: AXP) to the British bank.
Last year, as the travel industry reeled under the onslaught of the pandemic, JetBlue invited other banks to bid for running its credit cards. However, according to WSJ’s sources, the airline has also asked Barclays to extend its current contract.
Meanwhile, Goldman already has its foot in the door – it recently started to offer a payment-in-installments scheme to JetBlue customers booking vacation packages.
The attraction of airline co-branded cards
Goldman’s efforts to cut partnerships with other airlines have met with an obstacle – their existing card arrangements still had five years or more to run.
If Goldman is now looking to muscle in on Barclays’ credit card turf at Jetblue, there probably are good reasons for it.
One, unlike the wide field of opportunities for co-branding with retailers, there only so many airlines in the country.
Two, air travelers, particularly the frequent ones, represent a lucrative, high-spender segment that card issuers love.
Lastly, once the pandemic ends, travel demand could bounce back with a vengeance, and spending on airline credit cards could return to previous levels.
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