The Venmo Credit Card is Here
Venmo has played a major role in shaping how we exchange money in the 21st century. Last year, the company announced it would be rolling out a credit card in 2020. After months of silence and uncertainty, the Venmo credit card has finally launched.
Venmo already has a debit card available for its more than 40 million users. However, the platform has yet to become profitable for the parent company, PayPal. The Venmo credit card could change that.
Background on Venmo
Venmo has been around since 2009 but has gained major popularity in the past few years.
Venmo lets you send and receive money virtually and instantly. You create an account, link a credit card, debit card, or bank, and find the person with whom you want to send or request money. You can transfer money to anyone, anywhere, anytime.
It’s an extremely easy process that has partially made Venmo so popular with younger users. Plus, as opposed to other cash transfer apps, Venmo functions like social media as well. You can see payments your friends have made, and while the dollar amount is hidden, you can see the description of the transaction in which people can get creative with. It’s not exactly Twitter, but it’s a social feed nonetheless.
As with any cash transfer app, safety is a valid concern with Venmo. While some users have been the victim of hacks, for the most part, the app is perfectly safe. Venmo uses data encryption to protect all users against unauthorized transactions, and user info is stored on servers in secure locations to prevent breaches.
Venmo makes money by charging transaction fees, but they’re generally pretty small. You’d have to pay a 3 percent fee for sending money using a credit card, and a 20 cent fee for rushing a transfer to your bank. You can avoid both of these by only sending cash from your bank or Venmo balance, and waiting an extra business day for Venmo to complete bank transfers.
Overall, the app doesn’t generate much money for PayPal, its parent company.
The Venmo Credit Card
The company has partnered with Synchrony Financial to issue the card. Synchrony already offers more than 100 credit cards, most of which are tied to pre-existing brands. The company also works with PayPal, so a partnership with Venmo makes sense on both sides.
“For 15 years, Synchrony has been a strategic partner in offering credit cards that enable greater purchasing power and rewards for PayPal consumers,” said Dan Schulman, CEO of PayPal in a press release announcing the card. “We are pleased to deepen our relationship with Synchrony to bring groundbreaking new credit experiences to the Venmo community through a desirable credit card and a seamless in-app experience.”
Venmo’s credit card is unique for its personalized reward structure. As opposed to paying cash back in specific categories like gas or groceries, the Venmo card rewards you with cashback based on your own top spending categories. You’ll earn 3 percent back on your top spend area, 2 percent back on your next highest category, and 1 percent back on everything else. Your top spend categories adjust over time too, so you’re always getting maximized rewards.
The card also works with the Venmo app, where you can track your purchases and spend categories. You can also set notifications to get alerts when purchases are made or you earn cashback.
The card comes with no annual or foreign transaction fees and is designed with a chip to facilitate contact-free transactions. Like the cashback, each card is personalized too. Every Venmo card comes with a unique QR code that your friends can scan to send you money through the app!
The Bottom Line
Overall, the Venmo card comes with some really neat features. If you’re looking for a cashback card, it should catch your eye. Plus, if you’re already a Venmo user, the card gives you more ways to manage your money through the app.
See also: Everything You Need to Know About Venmo
