PayPal and Synchrony are teaming up to launch a Venmo credit card in 2020 - Business Insider

The news follows an April report in The Wall Street Journal that the peer-to-peer payments giant was in talks with banks and nearing a deal with Synchrony Financial. Details about the card remain scarce, but it will enable customers to split purchases, opt into sharing their payments in the social feed, and pay their bills directly in the Venmo app.

The card could reach a massive audience, but it would need an exceptionally strong value proposition to do so. Venmo is one of the leaders in the growing digital P2P space: It counts 40 million users, boasted $24 billion in volume in Q2 2019, and has reportedly been used by 20% of customers between ages 20 and 24.

This demographic, which represents the age when most consumers apply for their first credit card, is attractive to issuers looking to grow their audiences amid rising credit appetite and intense industry competition. But issuers including Amex have been aggressively targeting millennials too. Though Venmo is advantaged by its reach, the card would have to offer a valuable and differentiated rewards program, low or no fees , and a strong startup bonus to bring users into the fold.

And it plays to Synchrony's strengths in a way that could give the firm's business a much-needed boost. After a few tough quarters, Synchrony's purchase volume began accelerating again earlier this year, but the loss of top-five partner Walmart could impact its results through this year. Doubling down on its partnership with PayPal — the firm owns PayPal Credit's receivables and issues cards for the provider — could help improve its business.

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