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October 17, 2019Blog Posts

PayPal is launching a Venmo credit card to help monetize the payment app

CNBC

Venmo is moving from enabling payments with emojis on a phone to a more traditional method. The popular app, owned by PayPal, will offer a Venmo-branded credit card in 2020. Synchrony Financial will handle the banking side of the card.

Despite Venmo’s flood of users, the app has yet to turn a profit. It currently makes money from interchange fees through its debit card and customer deposits that are invested in government-grade securities like Treasurys, and from customers who pay a fee to have money transferred to their bank faster than a typical two-day wait period. PayPal has a profit-sharing agreement with Synchrony for the Venmo credit card that factors in things like purchase volume and number of new accounts.

The Venmo card is a way for the bank to diversify away from retail, and dip into the mobile payments boom.

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Interested in learning more about payment monetization?

Read TSG’s recent article The Merging of Software and Payments or download the infographic covering the four models of monetization and how they vary in complexity and level of risk vs reward.

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