Coronavirus galvanized the use of NFC payments and QR codes, and PayPal wants to harness both trends for Venmo’s first credit card.
A QR code adorns the front of the Visa-branded card, which also has NFC contactless payments built in. The card launches Monday in five different colors and is issued by Synchrony Financial.
The Venmo credit card uses the digital-first approach Apple Card popularized, so all activities from account activation to managing transactions and cash-back rewards occur within the Venmo app.
The combination of features — coming as CVS Pharmacy prepares to roll out PayPal’s QR code acceptance at 8,200 stores this fall — could go a long way toward achieving PayPal’s goal of transforming Venmo from a social media-powered P2P app into a more fully fledged shopping tool.
Making the QR code prominent helps in two ways.
“If you’re out to dinner and want to split a bill, the friends could just take an image of the front of the card to access the Venmo app and the Venmo user to pay them back for their part of the bill,” said Lisa Lanspery, senior vice president of communications Synchrony explained, noting that other Venmo P2P features are unchanged within the app.
Venmo’s 60 million users, with a heavy concentration of millennials, are using QR codes frequently to access menus and pay at thousands of restaurants that added them after coronavirus prompted people to minimize contact with germs. Highlighting QR codes on the card at this moment could help drive PayPal’s goal of expanding acceptance of the PayPal/Venmo QR code at more merchants.
Venmo credit card users earn cash back on every purchase, which is automatically added to a Venmo balance. A dynamic rewards system automatically adds the maximum creward of 3% of the purchase to the user’s highest-spend category each month; 2% is applied to the second-highest spend monthly spend category, with 1% cash back on all other purchases.
The eight spending categories include groceries; bills and utilities; health and beauty; fuel; entertainment; dining; transportation; and travel, trackable within the app.
There is no annual fee, but a 3% fee still applies when using the Venmo credit card to fund P2P purchases. Transfers funded by a debit card or bank account remain free.
Synchrony has made it a top priority to promote contactless payment in the post-coronavirus environment where consumers want to minimize viral spread. The Stamford, Conn.-based card issuer plans to add NFC technology to as many of its dual and cobranded credit cards as possible, according to Lanspery.
The Venmo credit card goes a step further.
“The Venmo credit card program is different in that we wanted to enable the card to be used however the consumer would like—and empower the consumer to make that choice, whether it’s the Venmo wallet, QR code, dipped or tapped plastic,” Lanspery said.
The latest Venmo product joins PayPal's existing roster of payment cards. PayPal already has two consumer credit cards — the PayPal Cashback Mastercard and PayPal Extra Mastercard, both issued by Synchrony Bank. The Bancorp Bank also issues the PayPal Cash Mastercard debit card.
“Venmo has become an integral part of the way our community spends, shares and manages their money, and the Venmo credit card represents yet another way we are expanding the capabilities of Venmo into people’s everyday lives,” said Darrell Esch, Venmo’s senior vice president and general manager, in a Monday press release.
The Venmo credit card is one of the first platforms to blend payments and social experiences at scale, said Matt Dill, Visa’s senior vice president and global head of digital partners and ventures, in the release.
“We are really excited to help take that unique capability to the next level by partnering with Venmo and Synchrony to introduce a digital-first Visa credit card that will connect the Venmo community with Visa sellers nationwide,” Dill said.
