Venmo’s new credit card is set to garner spend among core audience

  • Venmo’s new Synchrony-issued credit card is beginning a limited rollout.
  • The card is likely set to garner spend among Venmo’s core audience, in turn driving engagement for the firm and volume for Synchrony.

The card, which will be issued by Synchrony Financial and Visa-branded, will be made available to a targeted group of users who can apply within the Venmo app this year, before a broader rollout in 2021.

US venmo users and volume

Venmo’s new Synchrony-issued credit card is beginning a limited rollout.

Business Insider Intelligence

Approved users will receive both a virtual card number and physical companion card that is contactless-enabled and printed with their unique Venmo QR code. The card most notably boosts a tiered cash-back system that offers customers between 1% and 3% in eight categories. Customers’ 3% category will be determined in real time based on where they spend most, with the 2% being their second-top category, and 1% for everything else. 

The card could garner spending from Venmo’s core audience, in turn helping grow engagement and generating increased volume for both PayPal and Synchrony. Venmo’s rewards—the top determinant of primary card status—are good, especially because of the flexibility they offer. But they don’t stand out from competitors in other ways, which could make it hard to earn top-of-wallet status among a broad audience.

However, the card is predominantly aimed at existing Venmo users and designed to improve their experience, Darrell Esch, senior vice president and general manager of Venmo at PayPal, told Insider Intelligence. So it could gain traction among that large and growing user base, especially the younger users who might not have a credit card yet, thanks to its flexible rewards structure, low cost, and digital-first interface.

If effective, the card could help PayPal further monetize Venmo directly through fee revenues and incentives to use other monetized features, like Instant Transfer. And at the same time, it could indirectly grow engagement with and loyalty to the app by making it a more prominent part of customers’ daily lives. This could ultimately generate volume not just for PayPal, but also for Synchrony, which has been leaning into digital to grow.

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