SyPi Better than SciFi: Sandboxing Credit Card Innovation at the Point of Sale

by Brian Riley 0

Credit card payment, EMV

Private label credit cards (PLCC) offer consumers an option to branded Mastercard and Visa plastics.  You need to keep an eye on the interest rates and be prudent about not carrying the debt over from month to month but you will often find excellent reward opportunities.  Mercator recently covered the PLCC industry in this document.

Synchrony, a PLCC industry heavyweight, made an interesting breakthrough with real time mobile applications, as reported in today’s WSJ.  Using Synchrony’s backend processing, connected to the retailer through an application program interface (API) dubbed SyPi, retailers like Walmart can deliver rapid credit card approval and soon, instant check out application approvals.

  • One of the largest issuers of private-label credit cards in the U.S. is preparing for the next generation of consumer credit, using analytics to authenticate and evaluate applications in real time.

  • Synchrony Financial recently worked with Walmart Inc. to build mobile technology to let customers apply for a credit card from within the retailer’s shopping app. If approved, customers can use the new account immediately to pay for items in their virtual cart.

Getting into the pool with Walmart, the world’s largest retailer, is an invigorating place to beta test, but it will surely be a proving ground for any other retailer.  Connecting Synchrony’s back end with a retailer’s infrastructure offers the opportunity to connect data for real time offers and other sale-driving functions.

There is plenty of room to sandbox, also.

  • Developers, architects and designers at Synchrony’s innovation center here work closely with counterparts at retail partners, including Gap Inc. and Amazon.com Inc.

  • In the point-of-sale scenario, a customer can request a credit card from the store’s touch screen, having a link to an application sent to his cell phone.

  • The mobile carrier, such as Verizon Communications Inc. or AT&T Inc., would prepopulate fields such as name and address into the form. The shopper adds personal data about income and birth date.

  • Approval can be made in seconds and a credit line used to pay for goods right then, said James Oldham, assistant vice president of technology and mobile solutions architect.

Our research indicates there are more than 300 million private label credit cards in the United States; innovations that harmonize the merchant-retailer relationship are certainly a way to increase spend, expand usage, and build a better mousetrap.

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

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