This story was delivered to BI Intelligence " Payments Briefing " subscribers. To learn more and subscribe, please click here .
US-based store card issuer Synchrony Financial, which provides store cards for retailers including Walmart and Toys R Us, delivered another quarter of strong performance in Q2 2016 , with overall purchase volume increasing 9% year-over-year (YoY) to $31 billion.
At the same time, the firm’s digital channels continue to grow steadily, which could be driven by rising digital commerce and increased reliance on phones. Online purchasing: Synchrony’s online sales are up 27% YoY. That’s fairly consistent with the YoY growth that the firm has posted in the past several quarters, 29% and 23% in Q1 2016 and Q4 2015, respectively. That’s much higher than "US growth trends" in the industry overall, which hover around 14-15%. Synchrony’s success could be a result of strong online platforms from Synchrony’s partners, but it’s also likely related to the rise in popularity of e- and m-commerce across the board — BI Intelligence forecasts that US e-commerce sales will hit $631 billion in 2020, up from $341 billion last year.
Digital applications: Synchrony noted that about a third of its card applications occur digitally, and that it’s received 11 million mobile-based applications overall since 2012. Digital applications allow consumers to apply, and get approved, for cards on a near-immediate basis, which could attract consumers who are dependent on their mobile phones. It’s also plausible that many of the online and mobile applications occur directly at the retail point-of-sale (POS) as a way of targeting customers interested in claiming a discount or charging a high-value purchase to credit.
Synchrony’s investments in digital firms could help them remain “best-in-class” in these areas, something that CEO Margaret Keane noted is a priority. In order to stay […]
