According to a report in The Wall Street Journal, citing people familiar with the situation, Walmart executives wanted Synchrony to share more of the revenue from the cards and approve more applicants. The paper noted that the end of the relationship underscores how retailers are changing the game for store credit card issuers, requiring the likes of Synchrony and Citigroup to change how they operate.
With the number of retailers declining, the store credit card business is shrinking, requiring the credit card companies to compete more aggressively for the business that is available. Retailers like Walmart are discovering that they can demand more from the card companies to land their business, noted the report.
Walmart had expected to get more out of the Synchrony deal, but sources told The WSJ that loan losses – which stood at about 9 percent of outstanding balances on Walmart cards as of this past spring – impacted the amount it received over the years.
In 2017, Walmart started offering loans from Affirm, the FinTech, as an alternative after asking Synchrony to approve more applications for credit. Walmart even introduced Synchrony to ZestFinance, which makes software that helps lenders approve consumers who otherwise would be denied credit.
This kinda surprises me in the reasoning, I tend to believe synchrony was way more giving of cards and approvals compared to crapone?
As one of the people that wasn't exactly happy about this move, as Sync has treated me just fine. While Cap1 has not really done much. So it has me worried what Cap1 might do with my account.
That aside, It appears that Walmart simply wants anyone and everyone to have the card. Whether thay can afford the bills or not. Thus feeding into the debt mentality. Because in reality it would be Sync's problem if no one paid for the charges, all the while Walmart simply enjoys the profits. So I can see where the disconnect between the two are. Whether Cap1 will approve more peope than Sync did, we'll have to wait and see. As far as I'm concerned both lenders seem to be on par with each other.
it's still too early to tell since a lawsuit is currently pending between the two parties. The outcome would likely dictate whether SYNCB will keep the current CC portfolio or go to Capital One.
It sounds like the relationship is well and truly over, as bitter and baseless as the claims seem to be.
It seems to me like both parties are trying to harm the other, at this point... with Walmart pushing their weight around to tank Synchrony stock; and Synchrony holding the loan portfolio hostage.
But, from a legal standpoint, the contract likely spells out the compensation that Synchrony would get in a split. Walmart is just butthurt that they can't get Synchrony to take-one-for-the-team... when, Synchrony has zero incentive to sell the portfolio, without adequate compensation.
Walmart's, "implied promise," language, in their suit... is some of the most nonsensical wording that I've ever heard of being in a serious lawsuit. Surely, they cannot be serious. It's either in the contract, or it's not.
I would be fine if Synchrony simply kept the current cardholders, and allowed us to convert the accounts to one of their CC. Such as Amazon, Pay Pal etc. Though i imagine that it would just be the plain old Sinchrony Master Card.
I'm sure Cap One doesn't really want to buy all those old accounts, or even have most of the account holders. And rather aquire new accounts based on their own qualifying criteria. But who knows, they've aquired other debt before.
I think Sync would be wise to convert folks to a card akin to what they gave the R' US card folks who had a non-store card.... Theyd make a killing putting 2% cashback cards into all the previous walmart customers wallets...