Venmo, the peer-to-peer payment platform owned by PayPal Holdings Holdings Inc. (NASDAQ: PYPL), has begun issuing a Venmo Credit Card that offers cash-back rewards of up to 3% on purchases in a customer’s top spending category. The Visa card is being issued by Synchrony.

In the announcement from PayPal, a customer’s top spending category changes each month depending on actual card usage. Up to 2% cash back is returned on a customer’s second-highest spending category, and up to 1% on everything else.

PayPal and Venmo have been discussing a new credit card for more than a year in an effort to light a fire under Venmo’s massive user base who love the money-transfer app but don’t generate a lot of revenue for PayPal. At the end of the first quarter of 2019, PayPal reported that Venmo had around 40 million users.

Last fall, Venmo signed a deal with Synchrony to offer the card from Visa, which was designated as Venmo’s exclusive partner.

Venmo senior vice-president and general manager, Darrell Esch, that the new card gives customers the “same unique Venmo experience” as the company’s app and that the experience can by “seamlessly managed and controlled” from the app.

Dennis Bauer, Synchrony’s senior vice president and general manager of PayPal and Venmo, added that the card “sets a new standard in the industry through its auto-personalized rewards program in a native app experience that we feel Venmo customers will find very appealing.”

Venmo’s credit card begins its life with a customer base that eMarketer expects to reach nearly 74 million users by the end of this year. Peer-to-peer payments are expected to jump nearly 29% to $397 billion. Venmo and Zelle, a competing service owned by seven big U.S. banks, are expected to grab most of that business.

PayPal reported its best quarterly revenues ever in the second quarter, $5.3 billion, largely due to consumers choosing to make more online purchases as the COVID-19 pandemic continues to stifle sales at brick-and-mortar stores. Venmo processed payments of some $37 billion in the quarter, a jump of 52% year over year.

Venmo posted about $300 million in revenue last year and could add a third or more to that total for 2020 annual revenue. Analysts are looking for PayPal to post revenue of about $21.4 billion for this year. PayPal is going to have to do more to raise Venmo’s contribution to revenue than just issue a credit card.

PayPal’s shares added more than 2% Monday to trade at $196.02 in the noon hour. The stock’s 52-week range is $82.07 to $212.45, and the consensus price target is $219.56.

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