People wearing masks walk in the crosswalk near a Walgreens on September 30, 2020 in New York City.
Alexi Rosenfeld | Getty Images
Walgreens said on Wednesday that it will offer a growing list of financial products to customers – including a co-branded credit card and a prepaid debit card – while trying to earn more from their wallets and help them manage expensive medical expenses.
Credit cards will be launched in the second half of this year. They will be part of the Mastercard network and will be issued by Synchrony. They will be linked to Walgreens’ new loyalty program, which the company relaunched in November with a new name, advantages and features inspired by the pandemic, such as sidewalk pickup and delivery through DoorDash and Postmates.
Walgreens and its drugstore counterparts are adapting to rapidly changing consumer behaviors, which accelerated during the pandemic. Walgreens sought out new business opportunities, including an agreement with VillageMD to open hundreds of primary care clinics in its stores.
John Standley, president of Walgreens, said the company also sees financial services as one of those growth drivers. “As we continue to focus on creating new revenue streams, we hope to explore and introduce even more health and wellness payment initiatives in the near future,” he said in a press release.
It is the second major retailer this week to announce expansion plans for financial services. Walmart said on Monday that it is creating a fintech start-up with Ribbit Capital, one of the venture capital firms that support Robinhood. The separate company will be majority owned by the large retailer.
The pandemic and recession have put pressure on many families, who are trying to stretch their money to pay bills and face reduced working hours or unemployment. During the holidays, for example, an increasing number of consumers were looking for other ways to finance their purchases. Use of “buy now, pay later” for online orders grew 109% during the holiday shopping season, which ran from November 1 to December 31, with the biggest increase occurring in the last week before the Natal, according to a recent Sales Force report.
Affirm Holdings, a provider of installment loans to online buyers, will begin trading on Nasdaq on Wednesday.