Both new and existing Venmo cardholders can request the rainbow card, and it will first be offered to top cardholders who use their cards most, before opening up to all Venmo users on March 4.
The limited-edition rainbow card is likely designed to help Venmo increase adoption of its card.
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- Debit and credit card design is important to users, particularly millennials.Innovative and unique card designs have been effective tactics for cards in the past: JPMorgan Chases Sapphire Reserve ultra-premium card became popular, especially among millennials, in part because of its design. Other firms, including Acorns, Square, Discover, and Monzo have also put emphasis on unique card designs. Venmos push could attract users looking for a flashy-looking product, and also serves as a way to make the offering more recognizable than other products.
- Adding perks for top cardholders could also entice more spend.Venmo hasnt provided a significant amount of usage data on its card, which launched in July 2018, but the firm did say that usage grew 300% from August 2018 to September and is seeing growing demand, per TechCrunch . Rewarding customers who use the card more could convince other customers to turn to it more regularly as a way of accessing exclusive perks in the future, promoting usage in turn.
Increased Venmo card usage could further propel the firms push to monetize the service.Venmo is largely free to consumers and has been eating into PayPals take rate over the past several quarters as volume surges and accounts for a larger share of the firms overall total payment volume (TPV).
But the Venmo card is part of a three-pronged commerce enablement strategy (alongside Pay With Venmo and Instant Cashout) that could help PayPal monetize the service. So far, that push is going well: 29% of customers engaged in a monetized Venmo transaction by the end of 2018; and the service generated $200 million in revenue in Q4 2018.
But full monetization is still a ways away: In an interview with CNBC this week, PayPal CEO Bill Ready noted that the firm doesnt expect profitability from Venmo for at least the next two quarters, but that the app could be a very profitable one for us over the medium to long term, marking the first time the firm has given a time frame for Venmo monetization.
Taking steps to boost the Venmo card, which earns revenue from merchant-assessed per-transaction fees, could be one such tactic that helps the firm execute on this goal as it moves into 2019.
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SEE ALSO: The Payment Industry Ecosystem: The trend towards digital payments and key players moving markets
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