Surprising No One, Venmo Launches a Debit Card

by Sarah Grotta 0

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TechCrunch and other media outlets announced that PayPal’s person-to-person (P2P) product Venmo is now giving its users the option to have a debit card- well, really a prepaid debit card – to use at Mastercard accepting merchants and also at ATMs.  A Venmo debit card has been in pilot for some time, so this isn’t entirely a surprise.  What is a little surprising is that the brand on the front of the card has changed from Visa in the pilot phase to Mastercard in the launch:

Venmo today is officially introducing its own debit card in partnership with MasterCard, following beta tests of a Visa-branded debit card last year. The new card will allow Venmo users to pay anywhere MasterCard is accepted in the U.S., and will record transactions to the user’s Venmo account for easy splitting with friends. It can also be used at an ATM to withdraw funds from the Venmo’s account’s balance.

Unlike the beta version of the card, the MasterCard-branded Venmo card can be used to withdraw up to $400 per day at ATMs displaying the MasterCard, Cirrus, PULSE, or MoneyPass acceptance marks. No fees apply for U.S. MoneyPass ATMs, while the others will charge a $2.50 ATM domestic withdrawal fee.

The card can also be managed from within the Venmo app, allowing users to activate their new card, reset their PIN, or even disable a lost or stolen card. 

This prepaid debit card addition makes the Venmo product a more practical product for consumers since it will now allow transactions in both physical and virtual scenarios.  It also competes well with most financial institution products in functionality and fee levels.  If it doesn’t have a noticeable advantage, however, there may not be a compelling reason to use Venmo as a primary transaction account, but more for incidental purchases and some P2P transactions.    Of course, the reverse may be true as well.  A Venmo user, perhaps a younger consumer, without established loyalties to a bank or credit union may find these added features will keep them from seeking financial services from a chartered institution.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

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