Venmo Could Soon Launch a Credit Card with Synchrony
Venmo may be in talks with Synchrony to launch a credit card, according to a report from The Wall Street Journal. Sources told the Journal the PayPal-owned peer-to-peer payment platform is hoping to announce the card by the end of the year.
Many of the transactions on Venmo do not require fees. Thus, it has been difficult for the company to turn a profit. Venmo’s payment volume increased $21 billion in the first quarter of 2019, representing an increase of 73% year-over-year. However, that is still not enough to be profitable.
Venmo earns approximately $200 million in revenue annually and currently has 40 million active accounts. The company is projected to have $100 billion in payment volume by the end of 2019. However, PayPal CFO John Rainey says, “The next phase for us is to get Venmo to break even. And that’s not something that’s going to happen in the next quarter or two.” Launching a credit card could help fast-track Venmo’s profitability.
Last year, the company launched a debit card to connect with users’ accounts. The Venmo card, backed by Mastercard, has a unique vertical design, as well as smartchip and contactless payment technology. Users can instantly access their Venmo balances anywhere Mastercard is accepted, as well as withdraw cash from an ATM.