Venmo has played a major role in shaping how we exchange money in the 21st century. Now, with the announcement that a Venmo credit card will be coming out in 2020, the mobile payment platform is taking the next step forward.
Venmo already has a debit card available for its more than 40 million users but 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 which 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. It’s not exactly Twitter, but its a social feed nonetheless.
As with any cash transfer app, safety is a question 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.
Released Info on the Venmo Card
Venmo announced in October that it will roll out a credit card in 2020, but details are light so far. We do know that 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.”
The press release also promised “personalized shopping and payment experiences” for card users. There probably won’t be many specifics until next year. In the meantime, we’ll keep you posted on any new developments.
See also: Everything You Need to Know About Venmo