In September 2017, PayPal launched a Mastercard cashback credit card with Synchrony Financial in the US. In PayPal’s consumer credit US service, the card offered US consumers 2% cashback on all purchases offline and online. There was no annual limit, no minimum redemption amount, no expiration of cashback and no restriction on how to spend rewards. The goal was to provide customers choice and flexibility in how they pay when making purchases – whether online or in store.
In the November of 2017, Synchrony Financial agreed to acquire PayPal’s US consumer credit receivables portfolio with the idea of further delivering new services in the months and years to come. At the time PayPal said “Today, we are expanding our relationship with Synchrony Financial to further enhance and grow our consumer credit product offerings. Through this transaction, Synchrony Financial has agreed to acquire PayPal’s US consumer credit receivables portfolio. Together, PayPal and Synchrony Financial are committed to working together to build innovative, more personalized payment experiences for consumers and merchants on our unrivaled two-sided network.”
PayPal have now announced the deal is complete. Under the terms of the transaction, and related transactions with unaffiliated third parties, Synchrony acquired $7.6 billion in receivables, including PayPal’s U.S. consumer credit receivables portfolio, which totaled $6.8 billion at the time of closing, and approximately $0.8 billion in participation interests in receivables held by unaffiliated third parties. PayPal received approximately $6.9 billion in total consideration at closing.
PayPal and Synchrony have extended their existing co-brand consumer credit card program agreement, and Synchrony is now the exclusive issuer of the PayPal Credit online consumer financing program in the US, through 2028. This just become more significant as PayPal have also announced they have extended their agreement to offer PayPal Credit on eBay.
“We’re pleased that we’ve completed the sale of our U.S. consumer credit receivables portfolio. Our agreement with Synchrony accomplishes every goal we set out for our asset light strategy. We look forward to working with Synchrony to double down on our innovative consumer credit experiences for our customers and profitably grow the portfolio over time.”
– Dan Schulman, President and CEO, PayPal