Dive Brief:

• Synchrony has acquired consumer financing software firm Versatile Credit, the Stamford, Connecticut-based private label credit card issuer said Wednesday, the day the deal closed.
• Mechanicsburg, Pennsylvania-based Versatile, founded in 1995, allows retailers and healthcare providers to offer their customers financing in-store and online. The company has about 60 employees and all are joining Synchrony, a Synchrony spokesperson said. The company’s Mechanicsburg office location will remain.
• Terms of the deal for Versatile, which was sold by private equity firm PSG, were not disclosed. The acquisition is expected to be “immaterial” to Synchrony’s earnings per share.

Dive Insight:

Synchrony, which has about $119 billion in assets, works with some 400,000 merchants, including Lowe’s and Sam’s Club. Its CareCredit subsidiary is also one of the biggest companies in the medical credit card space.

The issuer pointed to Versatile’s “deep capabilities” in categories such as furniture, home improvement, automotive, jewelry and elective medical. Versatile links the customers of merchants and healthcare providers with lending products from a number of prime, secondary and tertiary lenders, Synchrony said in the release. 

That type of “waterfall financing” can improve customers’ chances of being approved for loans even if their credit isn’t the strongest, which can translate to more sales and bigger tickets for merchants. 

Versatile has worked with Synchrony for about 15 years. The acquisition allows Synchrony to tap Versatile’s reporting capabilities and integration with merchant systems, to “meet the changing demands” of the merchants and providers the issuer works with, Synchrony said.

Synchrony is “committed to bringing innovative technology and capabilities” to its retail, healthcare and other clients, said Maran Nalluswami, Synchrony’s chief strategy and business development officer, in the news release. 

“Versatile’s platform sits at the forefront of consumer financing, ultimately driving more sales for merchants and expanded access to credit for consumers,” Nalluswami said.

Versatile generates between $10 million to $15 million in annual revenue, TD Cowen analyst Moshe Orenbuch wrote in a Friday note. Boston-based PSG invested in Versatile in 2023, which Versatile planned to use to grow its rosters of lenders and merchant categories. 

Synchrony said it plans to maintain Versatile’s business strategy, management structure and data integrity, serving other lenders and their merchants and providers.

“We empower our partners with solutions to drive sales and growth while streamlining the user experience,” said Versatile CEO Ed O’Donnell in the release. “Joining Synchrony will enable us to bring our platform to more merchants and consumers.”

In 2024, Synchrony purchased Ally’s point-of-sale financing business. It included $2.2 billion of loan receivables, and relationships with about 2,500 merchant locations and about 450,000 active borrowers in home improvement services and healthcare.