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