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PayPal and Synchrony Collaborate, Extend Credit Card Program

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PayPal Holdings, Inc. (PYPL - Free Report) recently announced the completion of its consumer credit receivables transaction with Synchrony Financial (SYF - Free Report) . Pursuant to this, Synchrony acquired $7.6 billion in receivables, comprising PayPal’s U.S. consumer credit receivables portfolio, valued at $6.8 billion at the time of closing. Moreover, it includes $0.8 billion as participation interests in receivables held by unaffiliated third parties.

With this transaction, both companies have extended their current co-brand consumer credit card program arrangement and Synchrony will now act as the exclusive issuer of the PayPal Credit online consumer financing program in the United States through 2028.

PayPal expects to accomplish its asset light strategy, double down on their innovative consumer credit experiences for existing customers and profitably enhance its portfolio with this transaction.

This collaboration would actually help both companies combine their expertise in order to provide seamless digital payments as well as innovate for merchants, partners and consumers. This will also allow Synchrony to enhance its leadership position in consumer credit programs.

 PayPal and Synchrony Bank have teamed up to provide PayPal-branded consumer credit cards to consumers since 2004. This expanded agreement with Synchrony Bank for the U.S. PayPal Credit online consumer financing program and the U.S. PayPal-branded consumer credit card program, enables PayPal to be partners with an industry leader and widen its consumer credit ratings.

PayPal has always been active when it comes to forging strategic partnerships for providing better consumer services, penetration into different geographies, etc. Its ongoing collaboration with Visa Inc. (V - Free Report) in the United States, Europe and Asia-Pacific is intended to offer an enhanced consumer choice as well as an instant money withdrawal facility and data quality plus a point of sale acceptance.

The company has also been vigorously working with Mastercard Incorporated (MA) for 10 years now. Moreover, it has been successful in its solid strategic alliances with Alphabet Inc. (GOOG - Free Report) ’s subsidiary Google, Facebook, Inc. , Pinterest, et al over the last few years.

Shares of this Zacks Rank #3 (Hold) company have soared 52.48% in the past year, outperforming its industry’s surge of 32.99%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.






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