Tuesday , February 27, 2024

Synchrony Looks to Venmo’s Social Network To Help Market the P2P Service’s New Credit Card

PayPal Holdings Inc. and Synchrony Financial have been sparing about the details of a new credit card they plan to issue for PayPal’s Venmo peer-to-peer payment service, but on Monday a top Synchrony executive said the partners are counting on a key characteristic of Venmo to help market the new card.

“We’ll use the social network of Venmo to drive utilization,” Carol Juel, Synchrony’s chief technology officer, told Digital Transactions News. Venmo was one of the first P2P networks to offer a Facebook-like experience that lets users fill in recipients on the purpose of specific payments and comment on new features. In cases like the new credit card, which is expected to debut in the second half of next year, the social network working alongside Venmo could help announce the product and induce at least some users to apply for it.

A refreshed application process could help boost the user count, as well, Juel added. Synchrony on Monday announced upgrades to dApply, its digital application process for Synchrony credit products. The improved in-app process lets applicants apply for credit products in three steps, relying on identity verification from Payfone Inc., in which Synchrony is an investor. Payfone’s identity graph prefills key fields with data from the applicant’s mobile device while the applicant fills in the last four digits of her Social Security Number, according to Synchrony, which says the process reduces by 80% the number of fields applicants must fill in.

But while most observers expect the new Venmo card to run on one of the major card networks, Juel would say no more about the identity of that network than will PayPal. “[To be determined] on the cobrand,” she said.

Stamford, Conn.-based Synchrony has had a long relationship with PayPal, having issued a PayPal-branded credit card for the past 15 years. Indeed, “we are the exclusive credit provider for PayPal,” Juel said.

With its more than 40 million active users and $24 billion in quarterly payment volume, Venmo now presents a fertile field for a Synchrony card. “We’re excited about it,” says Juel.

In related news Tuesday, PayPal announced a cash-back and payout feature for Venmo. Users of the Venmo-branded Mastercard debit card, issued by The Bancorp Bank, can earn 5% cash back to begin with on purchases at Target, Sephora, Chevron, and other merchants. The reward is deposited directly into the holder’s Venmo account. The payout feature allows businesses to use an application programming interface to send rebates and rewards to user’s Venmo accounts. Businesses already using PayPal Masspay can continue using that integration, designating which account the funds should be sent to, PayPal said.

Both services could help increase Venmo usage at merchants, a long-held goal at PayPal as the company strives to earn merchant fees for acceptance of P2P service, which is free to users.

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