Yep, you read that right. New. Venmo. Credit. Card.
It’s a good reminder that your FinTech competitors aren’t just in the peer-to-peer payments business anymore. They’re issuing debit cards, credit cards and even loans in ways that are scarily appealing to consumers (especially up-and-coming Gen Z consumers).
So, let’s learn what the new Venmo credit card does and what it says about consumers. Then, your credit union or community bank will know what preferences to target.
What Does the Venmo Credit Card Do?
The Venmo Credit Card is a credit card with cash back and no annual fees. However, its cash back features are fairly unique.
The cardholder receives 3% cash back on their top spending category, 2% cash back on their second highest spending category and 1% cash back on everything else. A cardholder’s top spending categories are reassessed every month, so the consumer is always getting the maximum cash back.
On the Venmo app, you can track your expenses and see your estimated rewards in an easy-to-understand pie chart format. You can also put any cash back rewards toward cryptocurrency purchases if that’s what you want. And the card has a QR code so your friends have an easy way to Venmo you if you have to split a bill.
Three Consumer Preferences
Make no mistake, Venmo’s credit card offerings aren’t a fad. They’re appealing to consumers for three main reasons:
1. Financial Freedom – It’s true that some credit unions and community banks have up to 5% cash back rates on regularly changing “bonus categories,” but these categories don’t include everything. Venmo puts the ball in the cardholder’s court by giving them the highest cash back rate on their top spending category…no matter what it is or how much it changes. Consumers are also empowered to invest in cryptocurrency, turning the credit card into an impromptu investment tool. The appeal is less about the rates (other institutions have better cash back rates) and more about giving the consumer as much freedom as possible.
2. Personalization – The Venmo credit card adjusts to the cardholder’s changing financial needs. Every person’s top spending category is different, but each person gets 3% cash back regardless of the category. Make an effort to personalize your marketing and service as much as possible. Members or customers love it when you “call them by name.”
3. Simplicity – The Venmo app makes it easy for the cardholder to see what they’re spending and how much cash back they’ll receive. The QR code makes it easy to repay friends. The credit card just makes things easy. You must do the same. Create an experience that is simple to understand.
Overall, you want to give your members or customers as many choices as possible that suit their personal needs. And you want to do it in a way that’s clear. Make everything as convenient as possible.
Are you ready to fight back against FinTechs? Create a plan geared towards your future survival when you book a strategic planning session now.