The recent developments in Walmart’s credit card strategy mark a significant reshuffling in the partnership dynamics between one of the world’s largest retailers and major financial institutions. The breakup between Walmart and Capital One, and the subsequent pivot back to Synchrony Financial and Walmart’s own fintech venture OnePay, represent not only a corporate realignment but also a potential harbinger for broader changes in retail-fintech collaborations. This analysis will explore the reasons behind the split, the emerging fintech landscape around Walmart’s financial services, and the implications for consumers, banks, and the retail industry.
The Walmart-Capital One Relationship: Rise and Fall
From 2018 to 2024, Capital One held an exclusive role as the issuer of Walmart’s consumer credit cards, a position that gave the bank privileged access to Walmart’s vast retail customer base. This partnership was initially viewed as a win-win: Walmart gained access to innovative credit products without the complexities of a banking license, while Capital One tapped into a market larger than the GDP of many countries.
However, cracks appeared in this arrangement. Walmart filed a lawsuit against Capital One in 2023 to terminate the partnership prematurely, citing service deficiencies, particularly in customer service standards outlined in their 2018 agreement. Walmart also sought a revision to the credit loss-sharing arrangement, aiming to shift some financial risk away from itself. The legal dispute culminated with a U.S. federal judge ruling in Walmart’s favor, allowing the retailer to end the agreement early due to Capital One’s failure to meet service requirements.
Financially, this breakup had a toll: Capital One reportedly set aside over $800 million for credit losses following the split, a substantial cost reflecting the stakes involved. Additionally, the fallout coincided with a class-action lawsuit challenging Capital One’s acquisition of Discover, showing that the bank’s strategic positioning in retail credit cards is precarious.
Synchrony Financial: The Dark Horse Returns
Synchrony Financial, which previously issued Walmart-branded credit cards for nearly two decades before being supplanted by Capital One, is now set to re-enter the picture. Walmart’s fintech firm OnePay has selected Synchrony to issue new credit cards—both co-branded cards usable outside Walmart stores and private label cards accepted mainly at Walmart locations.
This return to Synchrony is more than a nostalgic re-connection; it signals a banking partner that has long-standing experience in retail credit card issuance and underwriting. Formerly associated with the lending arm of GE Capital Retail Bank, Synchrony already manages credit cards for Walmart’s sister health brand Walgreens and other retailer partners, making it a natural fit for Walmart’s renewed financial ambitions.
Synchrony’s role as a behind-the-scenes issuer will be paired with OnePay’s front-end technology and customer engagement efforts, presenting a hybrid model where Walmart retains control and innovation through its fintech, while synchronizing with a trusted bank for credit underwriting and regulatory compliance.
OnePay: Walmart’s Ambitious Fintech Venture
Launched in 2021 with backing from Walmart and fintech-focused Ribbit Capital, OnePay reflects Walmart’s broader ambition to develop a proprietary financial services ecosystem. OnePay has rapidly grown, amassing over 3 million active users and generating more than $200 million in annual revenue, culminating in a valuation of $2.5 billion.
This fintech startup not only facilitates credit card programs but also offers digital financial tools designed to empower consumers to save, spend, borrow, and grow money within a unified platform. OnePay’s product roadmap includes buy now, pay later (BNPL) offerings and installment loans — financial innovations appealing to Walmart’s diverse customer base seeking affordable credit options.
By owning the customer interface and brand experience through OnePay, Walmart is positioning itself not only as a retailer but as a financial super-app hub, rivaling traditional banks and fintech challengers alike. This strategy aligns with Walmart’s integration of real-time payments via the Clearing House’s RTP network and the FedNow system, signaling a commitment to reduce payment friction and enhance customer financial engagement.
Strategic Motivations and Industry Implications
Walmart’s shift away from Capital One and renewed partnership with Synchrony, supplemented by the growing influence of OnePay, reflects several strategic motivations:
– Control and Innovation: Walmart wants more say in product design, customer experience, and the financial terms. Delegating credit card issuance entirely to Capital One limited Walmart’s ability to evolve offerings rapidly.
– Risk Management: By involving its fintech arm, Walmart can better balance risk and rewards of credit portfolios and explore new lending models like BNPL, which might be harder to innovate through legacy banks.
– Financial Super-App Ambition: Walmart views fintech not merely as a service add-on but as a core driver of customer loyalty and revenue growth. OnePay’s ecosystem approach aligns with this vision.
For banks, the split is cautionary. Capital One’s loss highlights the risks of over-reliance on large retail partners and reputational damage from service-related disputes. Synchrony’s comeback demonstrates that specialized, experienced retail-focused banks still have relevance by adapting to fintech partnerships and investing in customer service.
Consumers may benefit from Walmart’s renewed push into credit innovation and integrated financial services, with new card offerings and digital tools promising greater convenience and flexible payment options. Yet, the transition period might bring some uncertainty regarding credit terms and cardholder benefits.
Conclusion: Walmart’s Fintech Evolution Signals a New Retail Credit Era
Walmart’s breakup with Capital One and its strategic realignment with Synchrony and OnePay underscore a transformative moment in how retail giants manage financial services. This evolution reflects the growing importance of fintech capabilities in delivering customer-centric, innovative credit and payment products within retail ecosystems.
By leveraging its scale and technology startup culture, Walmart aims to blur the lines between shopping and banking, providing customers with seamless financial experiences tailored to their needs. Synchrony’s return as a dependable partner ensures regulatory expertise and operational stability, while OnePay serves as the creative engine redefining consumer financial engagement.
This multi-pronged strategy could disrupt traditional retail banking models and set a precedent for other retailers to build or strengthen fintech ventures. For consumers and financial institutions alike, the Walmart case study offers a glimpse into the shifting landscape of retail credit — one driven by technology, partnership flexibility, and customer empowerment.
