Synchrony has completed its purchase of PayPal Holdings' consumer loan portfolio, but not before the two firms revised the terms of the acquisition first announced in November.
PayPal, based in San Jose, Calif., said Tuesday that Synchrony bought $7.6 billion in loan receivables; $6.8 billion in U.S. consumer loans and another $800 million in loan participations held by unaffiliated third parties.
The final sale price came it around $6.9 billion, or about $1.1 billion more than what the two firms agreed upon
The companies also said that they have extended their co-branded credit card agreement through 2028 and that Synchrony will also become the exclusive issuer for the PayPal Credit, which offers installment loans at the point of sale for online purchases, also through 2028.
The two companies have been partners since 2004 when Synchrony Bank started issuing PayPal-branded credit cards.
PayPal first entered the consumer lending business in 2008 when it acquired a company called Bill Me later, which offered financing for online purchases. That business accounted for around 6% to 7% of PayPal’s revenues and profits but last year, the company started seeking a buyer for that portfolio in order to
"Our agreement with Synchrony accomplishes every goal we set out for our asset light strategy,” PayPal President and CEO Dan Schulman said in a press release. “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."
Synchrony, on the other hand, has been looking to expand its presence in online consumer financing.
“This collaboration plays to both companies’ strengths in providing seamless digital payments and innovating for partners, merchants, and consumers," Synchrony President and CEO Margaret Keane said in the announcement. "It also expands Synchrony’s leadership in consumer credit programs.”
