Venmo, the popular mobile payment network owned by PayPal Holdings Inc., on Monday unveiled a digital-focused credit card, entering the fray of financial-services providers looking to leverage smartphones, Bloomberg reports.
The Visa credit card, issued by Synchrony Financial, will be managed through Venmo’s smartphone app, but accompanied by a physical card printed with a QR code. The primary methods of making purchases will be via a credit-card number for online shopping or the physical card in stores, Venmo said Monday.
One of the card’s key differentiators is its rewards structure, which gives users 3 percent cash back for their top spending category each billing cycle, 2 percent for the next highest and 1 percent for all other purchases, said Venmo Senior Vice President Darrell Esch and Dennis Bauer, who leads the Venmo and PayPal partnership at Synchrony.
The eight categories include bills and utilities, travel, groceries and dining and nightlife.
The rewards are the same whether purchases are made online or with the physical card, while Goldman Sachs Group Inc.’s Apple Card awards just 1 percent for physical-card purchases where Apple Pay is not accepted.
PayPal also has been rolling out QR code scanning for credit-card purchases at some retailers, including CVS Health Corp. drugstores, as another payment method. The physical Venmo card’s QR code, however, will be reserved for card activation and for other Venmo users to send card customers a payment.
The card can also be used in both the Google Pay and Samsung Pay apps for tap-to-pay purchases at retailers. The card, which doesn’t have an annual fee, will be rolled out to 5 percent to 15 percent of Venmo users this year, and available to the rest in the first quarter of 2021.
