PayPal Holdings, the corporate entity behind the PayPal payment processing product, and Synchrony, a financial services company that offers bespoke customer financing programs, announced the launch of a Venmo credit card. Venmo is PayPal’s mobile payment service. This is the first credit card it will offer consumers, with expectations that it will launch in Q3 of 2020. The joint initiative marks a deepening of ties, and a completely new stage in the companies’ consumer credit relationship.
In a press release, PayPal CEO Dan Schulman stressed the company’s desire to better serve customers, as well as their excitement to do so by strengthening a preexisting relationship.
“For 15 years, Synchrony has been a strategic partner in offering credit cards that enable greater purchasing power and rewards for PayPal consumers,” he said. “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.”
Synchrony’s CEO, Margaret Keane also praised the new initiative. In addition, she highlighted Synchrony’s ability to leverage its knowledge and technology to create new experience for Venmo users.
“PayPal and Venmo continue to transform the payment experience for consumers, and we are proud to be their partner-of-choice,” she said. “Synchrony’s digital technology and expertise will enable Venmo and PayPal to further grow their business by creating new innovative consumer experiences.”
The announcement met with cautious optimism from investment analysts. Venmo is best known for its peer-to-peer payments functionality. However, PayPal’s current revenue model for the platform does not monetize these one-to-one payments. Instead, PayPal made several moves in recent years to expand Venmo’s capabilities — including the issuance of debit cards and online payments — which cost customers a fee. The addition of credit cards will fit that model.
However, one thing PayPal will need to take into consideration is the increased potential for eCommerce fraudsters to target the new offering.