Digital Transactions Authoritative, insightful and timely information for payments professionals
Fresh off the introduction of its buy now, pay later product, the big private-label and cobranded credit card issuer Synchrony Financial on Monday reported that strong consumer spending in the second quarter boosted its purchase volumes and interchange income.
Stamford, Conn.-based Synchrony said total purchase volume hit $47.2 billion for the three months ended June 30, up 12% from $42.1 billion a year earlier. On a so-called “core” basis, which excludes the recent sale of Synchrony’s Gap and BP card portfolios, purchase volume rose 16% to $44.6 billion.
More purchases translated into more interchange revenue, which jumped 17.9% to $263 million from $233 million a year earlier.
“Synchrony achieved a second consecutive quarter of record purchase volume, characterized by broad-based demand across our platforms, and continued receivables growth,” Brian Wenzel, Synchrony’s executive vice president and chief financial officer, said in a statement.
Some 32% of Synchrony’s purchase volume comes from diversified and so-called value merchants. Another 29% is generated at home and auto merchants, and 28% comes from digital businesses, according to the company’s second-quarter report. Synchrony added or renewed card programs with more than 25 retailers in the recent quarter, including Sleep Number, Sweetwater, Fleet Farm, Mitsubishi Electric, and Suzuki. Synchrony also has a financing program for the health-care industry.
The majority of Synchrony’s revenues derive from interest and fees on its card and other lending programs. Net interest income totaled $3.8 billion, up 14.8% from $3.31 billion in 2021’s second quarter. After expenses and interest distributions to partner retailers, Synchrony posted net earnings of $804 million for the quarter, down 35.6% from $1.24 billion a year earlier but still higher on a per-share basis than analysts expected, according to reports on the financial wires.
Last week Synchrony unveiled its BNPL product called SetPay in 4, which allows merchants using Fiserv Inc.’s Clover platform to offer their customers the option to pay in four interest-free installments.
