Alliance Data Systems Corporation’s ( ADS Quick Quote ADS - Free Report) Card Services business recently collaborated with its long-time brand partner Victoria's Secret in a bid to provide its cardmembers a secured payment option. The partnership is expected to boost Alliance Data’s Card Services segment. Alliance Data’s Card Services business is a provider of market-leading private label, co-brand, general purpose and business credit card programs, digital payments, including Bread and Comenity-branded financial services. Founded in 1977 and headquartered in Columbus, OH, Victoria’s Secret, a subsidiary of Limited Brands, Inc., is an American lingerie, clothing, and beauty retailer known for high visibility marketing and branding, starting with a popular catalog and followed by an annual fashion show with supermodels dubbed Angels. As the largest retailer of lingerie in the United States, the brand has struggled since 2016 due to shifting consumer preferences and ongoing controversy surrounding corporate leadership's business practices. The latest tie-up is intended to reissue an improved private label credit card, known as Victoria's Secret Credit Card, for the cardmembers. Victoria's Secret Credit Card with new online payment features will enable cardmembers to pursue contactless transactions with the use of Apple Pay, which is considered to be a secured payment method. They will also get the privilege of having private label shopping experiences on the market. Not only this, the cardmembers can make contactless, secure transactions in store and get earnings rewards at Victoria's Secret. Apart from furnishing a secured payment option, this card is also intended to spur brand engagement and customer loyalty with rewards and benefits like perks of the month, anniversary gifts and birthday celebrations. Processed by Mastercard ( MA Quick Quote MA - Free Report) , it includes digital wallet capabilities as well as the added security of chip technology, expiration date and a CVV. The cardmembers will also get the benefit of transaction alerts. Therefore, the reissue of Victoria's Secret Credit Card is likely to enhance the Card Services segment of the financial transaction service provider. Alliance Data’s products and services are reported under its Card Services segment, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the company’s private label and co-brand credit card programs. This segment accounted for a lion’s share of Alliance Data’s revenues. Solid receivables growth in Card Services is expected to drive the top line of Alliance Data. Shares of this Zacks Rank #4 (Sell) private label credit card processing company have gained 23.9% year to date, against the industry’s decrease of 1.6%. We expect higher revenues, solid card services performance, strategic initiatives as well as a robust capital position to drive the company in the near term. Stocks to Consider
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