PayPal is updating its Synchrony-issued co-branded PayPal Cashback Mastercard credit card, which now gives customers 3% cash back when they check out using PayPal and 2% cash back on all other Mastercard purchases. The increased rate may be utilized whenever a consumer pays with PayPal, including online, on mobile devices, and even in-store using a PayPal QR Code, according to the business. Existing cardholders will be immediately upgraded from a 2% cash back rate to a 3% cash back rate on PayPal purchases, according to the business. In the coming weeks, it will also make the card available to new clients via the PayPal mobile app and PayPal.com.
PayPal claims it has revamped the user interface for card administration within the app and on its website to make it easier for consumers to access their rewards, manage their purchases, and make payments, in addition to the cash back increase, which is the major feature of this new card. Customers will now be able to access their rewards on a daily basis rather than waiting for a monthly statement cycle. They’ll also have the option of using rewards in a variety of ways, including making statement purchases, shopping at merchants, or transferring dollars to a connected bank account or debit card.
PayPal is offering a $100 cash back incentive on the first $500 spent on the card, which has no annual fees, to entice new sign-ups. The credit card’s consumer-friendly upgrade comes as PayPal confronts greater competition in the e-commerce industry from buy now, pay later (BNPL) companies. For example, in December, Afterpay partnered with Rakuten to offer buyer’s cash back benefits on installment purchases from partnering retailers. Affirm also started its own Cash Back program in the same month. Of course, Amazon, the world’s largest retailer, provides its own cash back rewards program, which pays 3% on both Amazon and Whole Foods purchases.
In a statement, Susan Schmidt, VP of Consumer Credit at PayPal, said, “Our customers shopped across 34 different categories last year, demonstrating the diversity of their needs and interests, and we wanted to build a credit product that was flexible and better matched rewards with their spending behaviors.” “The new PayPal Cashback credit card was created to allow PayPal clients to earn rewards and receive cash back on everyday transactions, regardless of the categories in which they spend during the month.”
PayPal’s announcement comes after the payments business reported lackluster Q4 2021 earnings in February, blaming factors including the eBay transition, inflation, supply chain issues, and more for its weaker forecast, revenue pressure, and slower user growth. However, PayPal has a number of rivals in both online and mobile payments, including Apple Pay and Google Pay, BNPL businesses, Amazon’s own checkout, and peer-to-peer rivals like Cash app and Zelle.