Synchrony wins back Walmart credit cards

Synchrony Financial (NYSE:SYF) stock rose 2.9% in Monday premarket trading after news that the company will once again issue Walmart (NYSE:WMT) credit cards, even as the giant retailer forges further into financial services.

OnePay, a financial technology firm backed by Walmart (NYSE:WMT), chose Synchrony (NYSE:SYF) to issue a co-branded card that can be used for purchases at any merchant and a private-label card that can only be used for Walmart purchases, the companies said. OnePay will start offering the cards in the U.S.this fall.

Synchrony (SYF) had previously managed Walmart’s (WMT) credit card program, but lost it to Capital One Financial (COF) in 2018. The latest agreement, though, doesn’t include the balances from Walmart’s existing credit card program.

Bloomberg News had first reported the credit card deal.

The credit card functionality will be embedded inside the OnePay app, offering Walmart’s U.S. customers a digital experience and the ability to access OnePay’s suite of financial services products.

After the initial launch and reserve costs, Synchrony (SYF) said it expects the program to drive loyalty and sales at attractive risk-adjusted returns and be accretive to its long-term financial performance.

In May 2024, Capital One (COF) and Walmart (WMT) announced the end of their credit card partnership, but said Capital One (COF) will retain ownership and servicing of the existing credit card program.

The new Synchrony (SYF)-issued Walmart cards will be the latest growth channel for OnePay, which offers a range of banking, lending and payment products, Bloomberg reported. Walmart recently invested more in the venture, leading a $300M fundraising round, along with Ribbit Capital, that valued the fintech at $2.5B.