Venmo Reportedly Working on Credit Card Offering

Even in our digital age, it seems some physical fallbacks are still hard to shake. Case in point: the popularity of plastic in the face of many payment options. This continued reliance is probably why we’ve seen several FinTech startups known for their disruption and innovation taking things back to banking basics by offering their own twist on debit card products. Now a new report in the Wall Street Journal suggests one peer to peer payment company is also looking to launch its own credit card.

According to WSJ, Venmo has been meeting with different banks to discuss the possibility of a Venmo-branded credit card since late last year. Furthermore it seems that the company is nearing a deal with Synchrony Financial for such a product and hopes to announce the card in the coming months. However details on what a Venmo credit card would sport in terms of rewards and features are apparently still being hammered out.

The reason why Venmo would consider a credit card offering is fairly simple: revenue. While Venmo’s free model likely helped it gain the popularity it enjoys today, the company has been looking for ways to actually turn a profit. Some of these efforts include introducing the ability for users to instantly transfer funds to their bank account for a 1% fee, as well as the aforementioned debit card, for which the company receives interchange revenue.

Speaking of debit cards, while several FinTechs have rolled out such products in recent months, the list of startups with their own credit card is far shorter. That said, one competitor Venmo may face for their latest endeavor is Apple. You may recall that the tech giant announced it was entering the FinTech and credit card fields last month when it unveiled the Apple Card. In addition to unique perks like daily cash back payments, that card will also integrate with the iPhone’s Wallet app to provide users with personal finance health tools. Also notable is that Apple Card users can send their cash back to friends and family using Apple’s own peer to peer payments system Apple Pay Cash.

Given the high bar, one can’t help but wonder what Venmo would need to stand out in the crowded world of credit cards. Although smart money would suggest that the brand can leverage its young fanbase (WSJ notes that 20% of those aged 20 and 24 reported using the app) to help make a potential credit card a success, existing competition coupled with exciting new entrants like Apple could pose a problem. Nevertheless it will be interesting to see if this potential project comes to fruition and if it helps kick off yet another trend in the FinTech space.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

U.S. Economy Added 263,000 Jobs in November 2022

Over the past several months, the United States economy has repeatedly offered mixed signals. Although gross domestic product results would suggest we're headed for a recession, the Federal Reserve has been forced to hike interest rates in a bid to slow inflation. Now, the latest figures also show that the economy continues to create jobs at a decent clip. According to the latest Bureau of Labor Statistics report, the U.S....

Amex Launches Digital B2B Payments Platform Business Link

For consumers, these days, there's no shortage of peer-to-peer apps they can use to move money, with some popular examples including Cash App, Venmo, and Zelle. As for businesses, the list of options for sending money to vendors may be more limited. Now, a well-known credit card company and small business supporter is introducing a new platform for this purpose. This week, American Express announced the launch of Amex Business...

Carbon Credit API Cloverly Joins Visa's FinTech Partner Connect 

Last year, Visa introduced the FinTech Partner Connect program to the United States, with the goal of introducing institutions to vetted startups that could help them expand their product offerings. Now, the latest company to join the program is Cloverly. Founded in 2019, Cloverly is an API for carbon credits, allowing businesses and consumers to help fight climate change. As the company points out, with the Visa partnership, Visa clients...