Venmo, the Paypal-owned smartphone payment app that features rapid cash transfers between friends, is in need of a cash infusion. And this digital payment platform is looking to go old school to boost its bottom line. Rumor has it that Venmo will soon launch its own branded credit card.
“Around 27 million people are expected to pay with Venmo this year according to eMarketer. Venmo is expected to report an annual operating loss of $394 million,” Inverse reported.
The Wall Street Journal reports that Venmo is considering the idea as it looks with increasing urgency for ways to turn a profit.
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“A Venmo credit card targets the young audience that already relies heavily on Venmo to transfer money to friends,” Sara Rathner, NerdWallet’s credit cards expert, told Inverse in an email. But it has been bleeding money. So plastic may be the way to go, some say.
“Executives at the digital payments company have been meeting with banks since late last year to discuss issuing a Venmo-branded credit card, people familiar with the matter said. The company, owned by PayPal Holdings Inc., is close to selecting Synchrony Financial as its credit-card issuer and is hoping to announce the card this year, one of the people said,” MarketWatch reported.
This is not the first time Venmo ventured into plastic, however. In 2018 it debuted a MasterCard-branded debit card. But this new product will be an actual credit card, from which the company can earn money from interest.
“Venmo isn’t alone in making such moves. Apple announced a credit card last month issued by Goldman Sachs, with one percent rewards for transactions and higher bonuses for spending on Apple services or using the Apple Pay service instead of the card itself. But the launch, and its lukewarm reception among credit card analysts,” Inverse reported.
