OnePay, Synchrony Launch of New Walmart-Backed Card Program Poses Challenge to Traditional Issuers

Financial services company Synchrony and OnePay, a consumer fintech, plan to launch a new credit card program in conjunction with Walmart that could put pressure on traditional issuers to upgrade their offerings.

The new cards will be embedded in OnePay’s app and offer consumers access to OnePay’s other financial products, including a suite of banking and payments solutions such as a debit card and a high-yield savings account. 

The new program is set to launch this fall and features two credit cards, a general purpose card and a private label card.

Cardholders will be able to use the general purpose card from Synchrony and OnePay anywhere that Mastercard is accepted. The partners will offer a private label card exclusively for Walmart purchases. Walmart previously engaged with Capital One to offer credit cards to shoppers.

Customers who haven’t heard of OnePay yet likely will soon. The company is backed by Walmart, and offering a new credit product to the 255 million people who shop with the megastore every week stands to raise OnePay’s profile.

By partnering with one of the most significant payment networks in the world in Mastercard, Synchrony and OnePay are positioning the general-purpose card to compete with cards from major issuers. 

“Our goal with this credit card program is to deliver an experience for consumers that’s transparent, rewarding, and easy to use,” Omer Ismail, Onepay’s CEO, said in a press release announcing the cards. “We’re excited to be partnering with Synchrony to launch a program at Walmart that checks each of those boxes and will help serve millions of people.”

The new private label card figures to grab the attention of the bevy of customers who frequently shop at Walmart. But the rate at which Walmart shoppers adopt the card may depend on the incentives they can access by transacting with it.

Initial information from the companies doesn’t outline all the private label card’s benefits, but it’s possible that it’ll offer rewards. Ismail referred to the program as providing “an experience” that’s “rewarding” for consumers in his press release comments.

Similarly, Linda Kirkpatrick, President, Americas at Mastercard, spoke about creating a “rewarding experience for Walmart customers” in her statement in the release. 

The remarks from Ismail and Kirkpatrick could simply be referencing a fulfilling payment experience that they envision the card providing. But they could also be a signal that users of the private label card will have access to a rewards system when they use it to make purchases from Walmart.

Members of Generation Z, or those born from 1997 to 2012, will likely appreciate the card’s inclusion within the OnePay app. A recent report reveals that 6 out of 10 Gen Z members spend more when using digital wallets for payments.

Members of Gen Z may spend more when using digital wallets than other payment methods.

On average, people who use digital wallets spend 31% more than those who use other forms of payment, according to the report.

Credit card issuers interested in assessing how the new private-label card may impact their card programs can determine how many of their customers’ transactions take place at Walmart’s online and physical stores. 

Issuers that determine that it’s in their best interest to retain their customers’ Walmart transactions can develop strategies now to encourage their customers to continue using their card and not migrate to the new offering from OnePay and Synchrony once it’s available later this year.