Synchrony Locks Down PayPal in a 10 Year Credit Card Co-Brand deal

by Brian Riley 0

The big get bigger as Synchrony locks in with PayPal on an $8 billion receivables acquisition and an exclusive deal that continues for the next ten years, as Zacks investor research points out.

  • Pursuant to this, Synchrony acquired $7.6 billion in receivables, comprising PayPal’s U.S. consumer credit receivables portfolio, valued at $6.8 billion at the time of closing.

  • Moreover, it includes $0.8 billion as participation interests in receivables held by unaffiliated third parties.

  • Synchrony will now act as the exclusive issuer of the PayPal Credit online consumer financing program in the United States through 2028.

Private label credit cards and co-brands are a hot sector in the U.S. card market; Our recent research does a deep dive on Synchrony’s positioning in the US Market.

  • PayPal has always been active when it comes to forging strategic partnerships for providing better consumer services, penetration into different geographies, etc.

  • This expanded agreement with Synchrony Bank for the U.S. PayPal Credit online consumer financing program and the U.S. PayPal-branded consumer credit card program, enables PayPal to be partners with an industry leader and widen its consumer credit ratings.

The deal is a sweet combination that reduces balance sheet risk at PayPal and bolts right into Synchrony’s co-branded sweet spot, allowing each to stick to their core business!

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

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