Venmo launches a credit card... because it's the Tim Tebow of PayPal
Treat yo' self... PayPal's Venmo is launching a physical credit card. Details on perks and rewards are light (cashback for brunch, taxi, and pizza, please @Venmo), but technically PayPal isn't a bank — so it isn't flying solo to launch this thing:
- What you don't see: Synchrony — The Utah-based bank covers the behind-the-scenes elements of credit card transactions.
- What you do see: Venmo — your monthly payments and daily latté splurges all appear in the Venmo app, even if you swipe the Venmo-branded plastic.
PayPal should request $$$ from Venmo... It's owned the peer-payment app since 2013. Now Venmo boasts 40M users who publicly/charmingly shame friends to pay them back. But Venmo's $300M annual revenues still aren't profitable, despite 3 consistent money-makers:
- Cash-just-sitting-there: The cash you leave in your Venmo account is invested by Venmo, so it earns money off your money.
- Debit card fees: Since launching a debit card, Venmo takes a small fee from the merchant each time you swipe (aka an "interchange fee").
- Impatient humans: You can pay extra for Venmo to transfer money into your bank account faster.
Venmo's kinda like football legend Tim Tebow... People love it, but it's not conventionally business successful. QB Tebow won a Heisman, yet hasn’t really found success as a pro in the NFL, MLB, or on TV. Like those NFL teams, PayPal's a fan of Venmo’s raw talent, but hasn't found the best use for it yet. By launching a debit card, merchant payments, and (now) a credit card, Venmo's hoping to finally find its profitable role on the team.