People wearing masks walk in a footpath near a Walgreens on September 30, 2020 in New York City.
Alexi Rosenfeld | Getty Images
Walgreens said Wednesday it will offer customers a growing list of financial products – including a co-branded credit card and a prepaid debit card – because it wants to win more cash and help manage expensive medical expenses.
The credit cards will be launched in the second half of this year. They will be part of the Mastercard network and issued by Synchrony. They will be linked to Walgreens’ new loyalty program, which recharged the company in November with a new name, fringe benefits and pandemic-inspired features, such as pick-up and drop-off via DoorDash and Postmates.
Walgreens and its drugstore competitors are adapting to rapidly changing consumer behavior that accelerated during the pandemic. Walgreens was looking at 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 views financial services as one of the growth operators. “As we continue to focus on creating new revenue streams, we look forward to exploring even more health and wellness payment initiatives in the near future,” he said in a news release.
It is the second major retailer this week to announce plans to expand into financial services. Walmart said Monday it is creating a fintech startup with Ribbit Capital, one of the venture capital firms backing Robinhood. The separate company will be owned by the major retailer in majority.
The pandemic and recession have put pressure on many families, who are trying to withdraw their money while paying the bills and facing fewer hours or unemployment. During the holidays, for example, a growing number of consumers were looking for other ways to finance their purchases. The use of ‘buy now, pay later’ for online orders grew by 109% during the holiday shopping season, which runs from November 1 to December 31, with the largest run-up taking place in the last week before Christmas, according to a recent report by Sales team.
Affirm Holdings, a provider of installment loans to online buyers, launches later on Wednesday on Nasdaq.