Dive Brief:

• OnePay, a digital financial services venture majority owned by Walmart, is collaborating with Synchrony and Mastercard to issue new credit cards for the retail behemoth, according to a Monday press release.
• The digital financial services entity, which is also backed by Ribbit Capital, will work with the card issuer and the network to launch general purpose and private-label credit cards this fall, per the release.
• The shift to Synchrony comes more than a year after Walmart received permission from a federal judge to end its credit card partnership with Capital One because of customer service issues.

Dive Insight:

Synchrony had partnered with Walmart for almost two decades before the retailer sued the Stamford, Connecticut-based bank, eventually linking up with Capital One.

But after a few years, Walmart sued Capital One, too — prompting Synchrony to signal its openness to partner again with the Bentonville, Arkansas-based retailer.

Walmart alleged Capital One repeatedly failed to meet several contractual obligations of the card partnership, including promptly issuing replacement cards to customers, as well as processing their payments and posting transactions to accounts in a timely manner.

Walmart has long been seeking ways to reduce the costs that it incurs when consumers use card payments across its chain of stores. Banks that issue credit cards and the networks that process payments charge merchants fees every time a card is swiped.

The retailer has been working with the venture capital firm Ribbit since at least 2021 to develop new ways for customers to pay. OnePay already offers a digital wallet as well as banking, financing and peer-to-peer payments services.

Walmart added new payment options in recent years as it seeks to become a destination for financial services and as a bevy of financial technology companies scramble to profit from new payment channels across an increasingly digitized payments ecosystem. 

“The credit card functionality will be embedded inside the OnePay app,” the release said, referencing the functionality of the new card to be issued by Synchrony, with processing by Mastercard.

Early in the development of OnePay, Ribbit poached two top executives — Omer Ismail and David Stark — from Goldman Sachs’s consumer bank, Marcus.

“Our goal with this credit card program is to deliver an experience for consumers that’s transparent, rewarding, and easy to use,” Ismail, the CEO of OnePay, said in the release.

Mastercard is the second-largest U.S. network behind rival Visa. Synchrony has long issued white-label cards for retailers and has often worked with consumers that have below-prime credit histories.