PayPal announced Tuesday (July 3) the closing of its deal with Synchrony, in which it acquired $7.6 billion in receivables from PayPal.
In a press release, PayPal said the receivables include PayPal’s U.S. consumer credit receivables portfolio, which totaled $6.8 billion at the time of closing, and approximately $0.8 billion in participation interests in receivables held by unaffiliated third parties. PayPal received approximately $6.9 billion in total consideration at closing. With the completion of the deal, PayPal said it and Synchrony have extended their co-branded consumer credit card program agreement to make Synchrony the exclusive issuer of PayPal's consumer financing program online in the U.S. through 2028.
"We’re pleased that we’ve completed the sale of our U.S. consumer credit receivables portfolio," said Dan Schulman, president and CEO of PayPal, in the press release. "Our agreement with Synchrony accomplishes every goal we set out for our asset-light strategy. We look forward to working with Synchrony to double down on our innovative consumer credit experiences for our customers and profitably grow the portfolio over time.”
PayPal and Synchrony have been partners since 2004 when they teamed up to offer a PayPal-branded credit card. The expanded agreement, which now covers online consumer financing, and the credit card enables PayPal to expand its consumer credit offerings.
“This collaboration plays to both companies’ strengths in providing seamless digital payments and innovating for partners, merchants and consumers. It also expands Synchrony’s leadership in consumer credit programs,” said Margaret Keane, president and CEO of Synchrony, in the same press release. “Together we can provide an enhanced customer experience for thousands of merchants and consumers.”
The closing of the deal with Synchrony comes days after PayPal and eBay announced they had extended their credit agreement so that eBay will continue to accept and promote PayPal Credit on its Marketplace platform.
“As part of our strong partnership with PayPal, we are pleased to continue to offer PayPal Credit to the millions of consumers who transact on the eBay platform,” said Alyssa Cutright, vice president of payments at eBay. eBay has been offering PayPal Credit to its buyers since 2008. The payment option gives its shoppers choice and flexibility in how they pay.