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.
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.
Synchrony told the paper that it has “worked very hard” in talks with Walmart and negotiated with the retailer in “good faith,” and added that it is diversifying into growth areas, pointing to a partnership with PayPal as one example. “While we always want to renew our relationships and the loss of the Walmart program is unfortunate, we view the situation as an outlier,” a spokeswoman said. Walmart declined to comment on the relationship with Synchrony.