Synchrony Financial is a consumer financial services company headquartered in Stamford, Connecticut, United States. The company offers a range of consumer financing products, including credit, promotional financing and loyalty programmes, instalment lending to various industries, and FDIC-insured consumer savings products through Synchrony Bank, its wholly owned online banking subsidiary.
1. Historical Background
Synchrony traces its origins back to 1932, when GE Capital Retail Bank was established during the Great Depression to provide customers with lines of credit for purchasing GE appliances. The lending arm continued to operate under the name GE Capital Retail Bank until its separation from the parent company in June 2014.
On 13 March 2014, General Electric (GE) filed with the United States Securities and Exchange Commission (SEC), announcing its intention to spin off the portion of its GE Capital business dedicated to retail credit cards. The filing confirmed that the new company would be called Synchrony Financial.
On 31 July 2014, Synchrony Financial successfully raised $2.88 billion in its initial public offering (IPO).
2. Recent Corporate Developments
2017 – Acquisition of GP Shopper.
2018 – Acquisition of Loop Commerce, the provider of the patented digital gifting platform GiftNow.
2018 – Synchrony’s largest programme: acquisition of PayPal’s $7.6 billion credit receivables portfolio. Under the agreement, Synchrony Bank became PayPal’s exclusive issuer for the PayPal Credit point-of-sale financing programme in the United States until 2028. The arrangement also included an extension of PayPal’s co-branded credit card partnership with Synchrony for the same 10-year term. These transactions, collectively known as the PayPal transaction, officially closed in July 2018.
2019 – Acquisition of Pets Best, a provider of pet insurance and wellness plans for dogs and cats, which now operates under Synchrony’s CareCredit platform.
As of recent reports, GIC Private Limited, the sovereign wealth fund of Singapore, holds 7.72% of Synchrony’s stock.
3. Products and Technology
Synchrony is the largest provider of private-label credit cards in the United States. Partner brands include Amazon, Lowe’s, Guitar Center, Gap, Cathay Pacific, Rakuten, Verizon, and Sam’s Club.
In 2019, Synchrony expanded its acceptance locations and value propositions for the auto and home sectors:
Partnered with Discover Financial to launch the Synchrony HOME Credit Card, usable at over one million retail locations nationwide for home-related purchases.
Expanded the Car Care acceptance network to more than 500,000 locations across 25 categories, including fuel, auto parts and servicing, car washes, parking, and ride-sharing.
The company operates four “Innovation Stations” in Stamford, Connecticut; Chicago, Illinois; Kettering, Ohio; and Hyderabad, India.
Synchrony Ventures, the firm’s corporate ventures arm, invests in early-stage companies offering emerging technologies and products.
Key technology initiatives include:
2016 – Launch of Digital Apply, an online credit application platform, and SyPI (Synchrony plug-in), enabling customers to access credit card information via retailers’ mobile apps. By 2019, over 20 retailers had adopted SyPI, with nearly $2 billion in payments processed through the system.
2018 – Introduction of the Alexa Store Card skill, allowing Amazon Store Card customers to manage accounts via voice technology.
Deployment of Sydney, Synchrony’s AI-enabled virtual assistant, across the majority of its retail partners to assist cardholders.
4. Public–Private Partnerships
Synchrony has established multiple partnerships with academic institutions:
2016 – The University of Connecticut’s School of Engineering launched the Synchrony Center of Excellence in Cybersecurity.
2018 – Opening of an emerging technology centre at the University of Illinois.
2019 – Launch of the Synchrony Digital Technology Center at the University of Connecticut’s Stamford campus. At the dedication, the company pledged $1 million to the “Connecticut Commitment” initiative, aimed at providing tuition-free education for lower-income Connecticut students.
5. Settlements and Legal Matters
In June 2014, shortly before its debut on the New York Stock Exchange, Synchrony reached a $225 million settlement with the U.S. Consumer Financial Protection Bureau (CFPB) and the Department of Justice. The consent decree alleged that, while operating as GE Capital Bank, the company engaged in deceptive and discriminatory credit card practices, particularly in relation to misleading enrolment in add-on programmes such as financial hardship relief.
According to USA Today, GE Capital Bank stated it had discontinued such sales practices in 2012 and had already refunded over $11 million in fees following its internal review. Nevertheless, the CFPB ordered significantly more in redress, and consumer complaints regarding these practices have continued.