PayPal Holdings Inc. said Monday that it would be rolling out a debit card for Venmo users, as the company explores a new way to make money off of the peer-to-peer service.
The new Venmo debit card will allow users of the popular money-transfer service to spend their balances in physical and online locations. Venmo said in a release that if you have a low balance, the card will reload using your preferred funding source to allow you to make your purchase. It will also work with ATMs.
Venmo users will see their Venmo card purchases in the app, which will give them the ability to split those charges among friends. The card comes in six color options—white, yellow, pink, blue, green, and black—and is currently only available in “limited release.”
The Mastercard Inc.-branded MA, -3.59% debit card is PayPal’s PYPL, -3.68% latest attempt to generate revenue from Venmo, as most peer-to-peer transactions between users are done for free. In recent months, PayPal has given Venmo users the option to choose Venmo as a payment option on e-commerce sites that accept it, garnering a cut of the transaction from the merchant. Users can also transfer their Venmo balances more quickly for a small fee.
From January through April, 11% of active monthly Venmo users “engaged in a monetized experience,” according to Venmo’s chief operating officer Mike Vaughan.
Square Inc. SQ, -6.45% started letting users of its Square Cash app get an associated prepaid card last year, and the company has seen success in monetizing its own peer-to-peer offering. The company may be monetizing roughly a third of all Cash app transactions, including through charges for instant access to funds as well as bitcoin trading.
PayPal shares are down 2.3% amid general tech weakness on Monday, while the S&P 500 SPX, -1.62% is off 1.1%.