Key themes
- Receivables growth of four percent YoY, slightly below the five percent YoY growth posted last quarter
- Purchase volume YoY growth remains strong at eight percent, more than doubling receivables growth
- Chase and Capital One continued to lead all issuers in terms of purchase volume growth; Capital One cites growth of its heavy spender base as a driver
- U.S. Bank led all issuers in receivables growth with nine percent YoY, largely driven by new account originations and portfolio acquisitions (such as BMW)
- Loss rates declined for all issuers compared to the previous quarter; YoY increases were generally modest
- Synchrony Financial posted material increases in YoY and quarter-over-quarter profitability primarily due to the reduction of reserves related to the sale of the Walmart (WMT) program, while Capital One profitability was adversely impacted
- Issuer earnings commentary highlighted a healthy consumer and favorable credit metrics despite late cycle concerns
Notable happenings
New partnerships
Walmart launched its card program with Capital One; ADS announced a PLCC program with Sally Beauty and a new co-brand and PLCC partnership with Lands’ End; U.S. Bank entered into an agreement with BMW on its co-brand program; ADS signed a new PLCC agreement with Sportsman’s Warehouse; Houzz announced plans to launch new co-brand program with ADS; AfterPay partnered with J Crew and Ulta Beauty; TD announced consumer financing platform in partnership with Versatile Credit.
Partnership developments
Delta and Amex relaunched SkyMiles card suite; Synchrony announced several renewed/expanded partnerships, including the expansion of the PayPal partnership with new Venmo credit card and a renewal with Dick’s Sporting Goods; Klarna and BigCommerce expanded partnership globally.
New products/features
REI (U.S. Bank Mastercard) added two percent reward category for mobile wallet spend; Northwest Federal Credit Union announced launch of instant-issuance credit cards; Stripe launched new small-to-medium business credit card offering cash back rewards.
Mobile & tech
US Fed announced plans to develop new real-time payment and settlement service; Splitit launched business-to-business installment payments platform; Venmo launched instant transfers to bank accounts.
Industry statistics (based on non-retail card issuers in scorecard section)
1Total receivables for all issuers below at end of 3Q19. 2Total purchase volume of all issuers below in 3Q19, not annualized. 3After-Tax ROA of issuers that publicly report – Citigroup, Capital One, Synchrony and Discover. 4YoY = Year-over-year change versus 3Q18. 5QoQ = Quarter-over-quarter change versus 2Q19.
Issuer scorecard ($billions)—Q3 2019
1Capital One is US consumer and small business credit cards and installment loans. Purchase volume excludes cash advances. 2American Express: Changed reporting method as of 2Q18; all figures are for US Consumer segment (revolving and charge products), which no longer reports net income. 3Discover receivables, purchase volume (excludes cash advances), and losses are US domestic card only; ROA includes all of Direct Banking segment (credit card loans represent ~80% of Direct Banking loans). 4All figures include all of SYF’s business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for ~70% of total receivables. YoY decline in receivables due to the transition of WMT portfolio. If WMT is excluded, receivables would have grown by approximately 6%. 5Active receivables grew ~11% YoY – the ~2.1% decrease reflects sale/reclassifications to held-for-sale of non-strategic clients.
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