PayPal’s peer-to-peer payments unit Venmo is reportedly exploring the possibility of offering a physical debit card that would be directly linked to a Venmo user’s account, and could be used at brick-and-mortar stores, Recode reports.
The social feeds of some Venmo employees displayed evidence of payments made at brick-and-mortar fast-food chains like Chipotle and Taco Bell, potentially suggesting public testing of the cards is underway, according to Recode.
A Venmo spokesperson neither confirmed nor denied the feature to Recode: "“[W]e will continue to test, introduce and expand features that allow people to use Venmo to pay friends and shop. We have nothing to announce at this time.”
This report comes just a couple of weeks after Apple announced it will unleash an Apple Pay feature that is essentially a direct competitor to Venmo via its iMessage platform within the next few months. Since that announcement, PayPal has dismissed concerns the effort would cause problems for Venmo.
But, you can bet PayPal and Venmo would like to answer Apple's announcement with some kind of new feature splash of their own. Creating a Venmo plastic debit card would be one way of doing that, and it could be a quick path to getting a large number of merchants to quickly start accepting Venmo payments.
The Recode report comes not long after a PayPal executive told Retail Dive at IRCE in Chicago — just a few days after Apple's news — that the company was getting close to enabling PayPal merchants to accept Venmo payments from customers for merchandise.
At that time, PayPal didn't specify exactly what form those payments would take. PayPal may be testing both app-based payments to PayPal merchants as well as a Venmo debit card that could be used at brick-and-mortar point-of-sale. Venmo, as it told Recode, is testing new features, and that could mean many different things. In addition, PayPal seems to understand very well that Venmo could be a very potent, not-so-secret weapon in the digital wallet wars.
Whatever Venmo has in the works, we should know fairly soon. PayPal is due to report second quarter earnings late next month and may have a lot to say about new features and acceptance strategies.