By the numbers: Synchrony released its Q3 earnings—here’s what you need to know.

• In Q3 2021, purchase volume increased 16% year over year (YoY), an improvement from Q3 2020’s pandemic-induced 6% decline YoY.
• Compared with Q3 2019, volume grew 9% YoY—or 16% YoY excluding the Walmart portfolio, which it sold in October 2019.
• Synchrony’s co-branded card volume—which accounted for approximately 40% of total purchase volume in the period—surged 29% YoY in Q3.

How we got here: Improvements in economic metrics like US unemployment—which at the end of Q3 dropped to 4.8%—may have increased risk appetite and led to stronger spending. Annual US retail sales growth for July, August, and September surpassed 11%, per the US Census Bureau, which likely boosted Synchrony’s co-branded card volume for the quarter.

What’s next? New tie-ups and product launches will likely propel Synchrony’s card volume growth into the next quarter.

Synchrony's recent partnership with Clover—Fiserv’s point-of-sale (POS) platform—will bring Synchrony’s POS financing products to Clover merchants and also let them accept private-label credit card payments.

• The tie-up adds another distribution channel to Synchrony’s ecosystem, which should help it extend its lending reach. That could attract new active accounts, which in Q3 jumped 5% YoY and hit 67.2 million.
• The relationship is also expected to open up future opportunities for Synchrony to cross-sell its products to Clover merchants.

The issuer recently launched a short-term installment lending solution, SetPay Pay in 4, which lets customers pay for purchases under $500 in four interest-free installments.

• The solution complements SetPay Installment, a long-term installment offering. SetPay Pay in 4 builds out Synchrony’s financing product suite, giving merchants more POS solutions to choose from.
• It can also help Synchrony compete for buy now, pay later (BNPL) market share—a segment that’s quickly expanding: The number of US BNPL users is projected to surge 81.2% YoY this year, per Insider Intelligence forecasts.

In August, Walgreens rolled out the myWalgreens Credit Card Program, which includes a co-branded Mastercard and a private-label store card both issued by Synchrony.

• The cards’ health-related value proposition and the program’s focus on digital—thanks to Synchrony’s digital capabilities, which were a key growth driver in Q3—will likely help spur growth and also help Synchrony offset future losses from selling the Gap portfolio.

Go deeper: For a closer look into Synchrony’s co-branded business and how it stacks up against competitors, check out the “Co-Brand Credit Card Report.”