Key themes

    • Purchase volume experienced a significant rebound in Q3 relative to Q2, as pandemic lockdowns generally eased during the quarter; spend has not yet recovered to pre-pandemic levels – all issuers reported negative YoY growth.
    • Alliance Data and American Express, which were among the most impacted by pandemic lockdowns, showcased the largest QoQ spend recovery; AXP points to growth in non-T&E spend and a modest recovery in travel spend as drivers.
    • Receivables continued to decline for most issuers in Q2 though some did increase QoQ.
    • Credit quality remains stable, although issuers generally expect losses to increase and unemployment to remain high well into 2021.
    • Issuer profitability exhibited a drastic rebound from Q2, primarily driven by low/modest provision expense (after two consecutive quarters of large reserve builds), further bolstered by spend recovery and benign losses.

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Notable happenings

New partnerships
Synchrony and PayPal launched the new Venmo co-brand card; Wayfair announced the transition of its PLCC and launch of a new co-brand card with Citi (from ADS); Goldman Sachs announced the acquisition of the General Motors co-brand portfolio (from Capital One); First National Bank of Omaha announced the launch of a co-brand credit card with Ford; Alliance Data launched a PLCC product with Sally Beauty; Emirates launched a US co-brand credit card with Barclays; Hotels.com launched a co-brand card with Wells Fargo; U.S. Bank launched a suite of new co-brand products in partnership with BMW.

Partnership developments
Synchrony renewed its PLCC and co-brand relationship with Sam’s Club; Alliance Data renewed its private-label agreements with GameStop and Bealls and Burkes Outlet; Apple discontinued its co-brand partnership with Barclays.

New products/features
United launched a new co-brand credit card with Chase (no annual fee); Chase launched the new Freedom Flex card.

Mobile & tech
Alliance Data announced the acquisition of Bread and a processing partnership with Fiserv; AmEx announced the acquisition of Kabbage; ChargeAfter launched Visa installments in the US; Synchrony announced the public rollout of SetPay (online short-term installment financing).

Industry statistics (based on non-retail card issuers in scorecard section)

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1 Total receivables for all issuers below at end of 3Q20. 2 Total purchase volume of all issuers below in 3Q20, not annualized. 3 After-Tax ROA of issuers that publicly report – Citigroup, Capital One, Synchrony, Discover and ADS. 4 YoY = Year-over-year change versus 3Q19. 5 QoQ = Quarter-over-quarter change versus 2Q20. 

Issuer scorecard ($billions)—Q3 2020

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1 Capital One is US consumer and small business credit cards and installment loans. Purchase volume excludes cash advances. 2 American Express changed its reporting method as of 2Q18; all figures are for US Consumer segment (revolving and charge products) which no longer reports net income. 3 Discover receivables, purchase volume (excludes cash advances), and losses are US domestic card only; ROA includes all of Direct Banking segment (credit card loans represents ~80% of Direct Banking loans). 4 All figures include all SYF business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for ~65% of total receivables. 5 Average receivables of $15.3B (does not include loans held for sale).

Year-over-year growth rate trends

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Profitability trends – ROA proxy

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1After-Tax ROA is a weighted average of – Citigroup, Capital One, Synchrony, Discover and ADS.


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