The apparel retailer will discontinue its partnership of more than 20 years with Synchrony when their contract ends in April 2022, costing Synchrony one of its five biggest retail card partners, per The Wall Street Journal. Gap’s portfolio accounts for approximately 5% of Synchrony’s loans receivable and includes about 11 million open accounts between its private label and cobranded cards. Gap reportedly sought an issuer that would handle more of its program’s costs, offer guaranteed revenues, and integrate with its rewards program, all of which could have been part of its decision to work with Barclays.
This marks Synchrony’s second major partnership loss in recent years, but it’s hard at work rebuilding its portfolio.
Meanwhile, Barclays is moving to diversify its card partnerships by adding Gap, which could be a common strategy among issuers as the travel industry—a popular cobrand category—struggles to recover from the coronavirus pandemic. Many of Barclays’ cobranded cards are with companies like airlines, resorts, and cruise lines, and it only lists one retail-focused cobrand on its site, a partnership with Barnes & Noble. Bringing in Gap helps Barclays become less reliant on the travel industry’s recovery. And many issuers are considering taking similar steps—JPMorgan Chase has reportedly partnered with Instacart to offer a new card, and several issuers are bidding to develop a card with DoorDash.