PayPal is partnering with Synchrony Financial to launch a credit card for Venmo users.
Although Synchrony Financial is the one handling the banking side, customers won't be logging onto Synchrony's website. Instead, they pay bills directly on Venmo app. They can also opt to share payment history on their social feed, split purchases with other people, and get real-time alerts to monitor card activity.Despite Venmo's flood of users, the app has yet to turn a profit.
PayPal's Esch said there were multiple parties vying for the bank partnership, but would not say which were competing. The Venmo partnership extends a 15-year deal Synchrony already had with PayPal. The bank also powers Amazon, Lowe's, Banana Republic, JC Penny and other co-branded credit cards. Those partnerships accounted for $13.1 billion, or 75%, of Synchrony's total interest and fees on loans in 2018.
The Venmo card is a way for the bank to diversify away from retail, and dip into the mobile payments boom. "This is going to a big partnership for us -- we know that Venmo is a growing customer base," Synchrony CEO Margaret Keane told CNBC. "This sets us up as a company that can demonstrate digital savviness and innovation and at the same time, and leverage things we've done in the past, like managing the relationship with a partnership and building out great analytics."
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