Over the decade or so since the financial crisis, competition in the credit card industry has gradually increased, and going into 2020 it had never been higher. So it might seem the last thing the market needs is another new credit card product.

PayPal's (PYPL -2.07%) new Venmo credit card, issued by Synchrony Bank (SYF 2.78%), could be a different story. Not only does it already have a massive user base to market the product to, but there's also something unique about the card's cash-back rewards structure, as Jason Moser and Matt Frankel, CFP, discuss in this clip. 

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Jason Moser: Matt, we were talking about this a couple of weeks ago when we were discussing PayPal and all of the different types of things that PayPal has been doing with the business. The honey acquisition, the different things it's doing in regard to digital and mobile wallet, and what-not. And PayPal came out with some news here recently in regard to the Venmo side of the business. The company, they're introducing a Venmo credit card. It's something that will be in partnership with Synchrony Bank, which is obviously a longtime partner of PayPal's. Venmo, as we know, was a part of PayPal's business when they made that Braintree acquisition. You know, it's a credit card. I know this probably isn't a big driver for the business, at least today. And reading through all of the nuts and bolts of this deal of this product here, I really do like the move. It feels like it creates yet another reason to be in that PayPal universe.

Matt Frankel: Yeah. Well, for one, I think this is a win for Synchrony, before we actually get into PayPal.

Moser: Well, I like that angle, too. [laughs]

Frankel: [laughs] Synchrony is, as you know, the big-store credit card company. And they are the issuer of the PayPal credit card. But, being honest, Venmo is cooler than just PayPal. It just is. And this card, [laughs] what really struck me about the card was the rewards structure. It's a 3% cash-back rate in one of eight spending categories. But the cool thing about it is, it's whatever spending category you use most. It's not like the rotating categories where you only get the best rate on gas and groceries if you don't even use the card for that.

Moser: Yeah, and they're not, like, trying to push you into some sort of consumer behavior. They're just rewarding you for your behavior that you just kind of do every day.

Frankel: Right. You know, 3% back on your most used category, 2% back on the category you use the second most. And just looking at it, it's groceries, bills, and utilities, health and beauty, gas, entertainment, dining and nightlife, transportation and travel. So if you want a credit card that gives you 3% back on travel, get the Venmo card and use it exclusively for travel. It's a lot of optionality for the customer, which is really nice, and I think that's going to be the edge. So I think this is a win, both for Venmo users and for Synchrony.

Moser: Yeah, I tend to agree. And it's a Visa card, if we didn't mention that. So, I mean, those are the three players in that value chain, so to speak. You've got Visa, Synchrony, and PayPal. The other thing I found interesting about this card, and this sort of couples with PayPal's recent tie-up with CVS (CVS -0.02%). They recently forged a relationship with CVS to display the QR code in CVS stores. You know, the QR code, it's yet another way to really implement that mobile payment system. That's where you can actually scan that QR code, and essentially, it makes things operate more quickly. I mean, you get from Point A to Point B, I think, just a little bit more quickly.

And in the case of the card, they're going to actually put the QR code on the front of the physical credit card. The physical credit card still has a place [laughs] in this world. I know that some people like to think, oh, I can just pay with my phone. The fact of the matter is, if you're going to pay for something, you're going to pay with your phone or you're going to pay with your card, but either way, you've got to get something out to make that payment, right? There's still that point of friction. So, I mean, we've seen where Amazon (AMZN -0.18%) is trying to fiddle around with being able to just kind of show your hand, right, they wave your hand and make that payment. And hopefully, that's technology that continues to develop and one day maybe take mainstream adoption, but we're not there yet, obviously. But I do feel like having that QR code, that's something that's very much in touch with the younger audience that uses Venmo to begin with. Which kind of goes back to that point that you made. I know that was a little bit tongue-in-cheek, but really it was spot on. Venmo is really, I think, perceived as being cooler than the PayPal brand.

Frankel: It is for sure. And the QR codes definitely help it. It makes things easier. For example, if you're paying the bill and you're with six of your friends, you take your Venmo credit card out to pay the bill. They all take their phones out, scan your QR code, and send you money. That's why you don't have to physically pull up your QR code while you're trying to pay the check with your credit card. It makes things less complicated, especially, like you said, for today's consumers. I mean, I don't know even if I have six friends anymore, but back when I did, [laughs] splitting the bill was a chore. You know, you sit there and everyone has to get change, and it was a pain. And this kind of simplifies an already simplified process by Venmo even a step further, I think.