(Bloomberg) -- Inside Synchrony Financial’s headquarters in Stamford, Connecticut, sits a carved-up sedan near a faux living room.
It’s an odd sight in the offices of the largest issuer of retail credit cards. But technologists there are at work testing ways to let customers pay monthly bills by talking to their television or order school supplies from car dashboards while en route to a store. Such is the new reality for a company whose fate is closely tied to that of retailers, which have had to revamp in-store experiences as more purchases are made online.
“Retail is not the easiest space,” Chief Executive Officer Margaret Keane said in an interview. “What we want to be known as is a company that is really on the forefront of digital commerce,” she said, adding that her company is “moving away from what I would say is traditional brick and mortar but really being at the point wherever that customer chooses to engage.”
Synchrony has long counted some of the country’s biggest retailers as its partners, including TJX Cos., Gap Inc. and, yes, online giant Amazon.com Inc. Now, the credit-card issuer has set its sights on nabbing big partners outside traditional retail, such as airlines and car companies. It’s also expanding into new industries with its CareCredit arm, which offers point-of-sale financing at medical offices, veterinary clinics and day spas.
The decision to diversify comes at a crucial time: Last year, Walmart Inc. opted to move its co-brand and private-label credit card programs from Synchrony to Capital One Financial Corp. Meanwhile, store credit-card issuers are having to deal with upstart technology companies offering easy access to personal loans at checkout.
Store-card issuers are “now faced with more competition at the point of sale,” said Paul Siegfried, who leads the credit-card business at TransUnion. “It’s not just about the other credit cards in your wallet versus the private-label card. They’re now presenting another payment option to the consumer right there at the point of sale.”
This summer Synchrony will mark its fifth anniversary of going public, but its history can be traced back to the Great Depression, when its former parent, General Electric Co., created the unit to help Americans finance appliance purchases.
Since losing the relationship with Walmart last year, Synchrony has renewed agreements with three of its of largest card partners: Lowe’s Cos., J.C. Penney Co. and Walmart subsidiary Sam’s Club. PayPal Holdings Inc., meanwhile, has taken Walmart’s spot on the list of Synchrony’s five largest partners, based on interest and fees from loans.
With new agreements in place, 22 of Synchrony’s 28 partnerships -- representing about 97% of the interest and fees it earns on card loans -- don’t expire until 2022 or beyond, according to regulatory filings. Now, the company is seeking partners outside of traditional retail, said Tom Quindlen, who leads the firm’s retail card business.
“The business grew up in retail many many years ago, but we’re in so many other industries, and we’re expanding,” he said. “We’ve got a pipeline of deals that we’re chasing. Many of them are non-retail-specific.”
Synchrony’s innovation lab in Stamford includes a mock checkout station, where the firm’s technology team tests ways to speed up the credit-card application process. With customers no longer willing to put up with long paper forms, Synchrony is introducing a process where they’ll get texted a link to an application that’s mostly filled out already. With a few clicks, they can receive approval right away.
“We could actually approve you now with nothing, but the consumer doesn’t like that,” Keane said, noting that Synchrony usually has the necessary information already, something most customers don’t realize. “You have the consumer on the other end of whatever electronics you’re using, and we have to make sure we’re listening to their voice.”
The company’s CareCredit arm has also expanded, entering 25 new health-care specialties last year, including physical-therapy facilities and urgent-care centers. Customers with the CareCredit card have access to 220,000 medical and veterinary offices around the U.S.
“Most of our volume coming now is coming from folks using the card more than once,” said Beto Casellas, who leads the CareCredit unit. “It may have started because you have an emergency with a pet and have to do a $2,000 surgery, and you need CareCredit. But, after that, the same consumer says, ‘I need a dentist, where do I go?’”
The company recently promoted Brian Doubles, its longtime chief financial officer, to president. With the new title, Doubles will oversee areas where the company hopes to grow, including its venture investments and acquisitions, data analytics and the firm’s expansion into consumer-banking products, such as high-yield savings accounts.
With a bevy of new priorities, Doubles has an instantaneous answer when asked if Synchrony will still be known primarily as a store-card issuer in five to 10 years:
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