People with masks walk on a pedestrian crossing at a Walgreens on Sept. 30, 2020 in New York City.
Alexi Rosenfeld | Getty Images
Walgreens said on Wednesday that it will offer a growing list of financial products for customers – including a co-branded credit card and a prepaid debit card – as it seeks to gain more from their wallets and help them 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 the company relaunched in November with a new name, perks, and pandemic-inspired features such as roadside pickup and delivery through DoorDash and Postmates.
Walgreens and its drugstores are adapting to rapidly changing consumer behavior that accelerated during the pandemic. Walgreens has looked to new business opportunities, including a deal with VillageMD to open hundreds of primary care clinics in its stores.
Walgreens president John Standley said the company also sees financial services as one of those drivers of growth. “As we continue to focus on creating new revenue streams, we look forward to exploring and introducing more payment initiatives for health and wellness in the near future,” he said in a release.
It is the second major retailer this week to announce plans to expand into financial services. Walmart said Monday it is setting up a fintech start-up with Ribbit Capital, one of the venture capital firms Robinhood backs. The separate business will be largely owned by the big box retailer.
The pandemic and recession have put pressure on many families, who are trying to clean up their money while paying the bills and coping with fewer hours or unemployment. For example, during the holidays, more and more consumers looked for other ways to finance their purchases. The use of ‘buy now, pay later’ usage for online orders grew 109% during the Christmas shopping season that ran from November 1 to December 31, with the largest run-up occurring in the last week before Christmas, according to a recent report from Sales Team.
Affirm Holdings, a provider of installment loans to online shoppers, will begin trading on Nasdaq later Wednesday.